When: Who it Affects: |
Lower capital gains rate for assets held for five years or more Most investments held more than one year are subject to capital gains tax at a top rate of 20% (10% for investors in the 15% tax bracket.) But effective in 2001, individuals in the 15% tax bracket will pay capital gains tax at a rate of 8%, instead of 10%, on profits from the sale of investments held more than five years. A similar rate reduction will eventually apply to higher-income investors but not until 2006. If you're in a tax bracket higher than 15%, you'll be eligible for an 18% capital gains rate, rather than 20%, for investments acquired on or after Jan. 1, 2001 and then held more than five years. The lower rates apply to most but not all investments. Among those ineligible are collectibles. Nor do the lower rates apply to gains from the sale of investment real estate to the extent of depreciation deductions previously claimed |
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