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What are capital gains taxes?
Capital is basically your investments; gains are what you get when you sell an investment at a profit. And capital gains taxes are the government’s share of that profit. The good news is that if you hold the investment longer than one year, you generally pay less tax on capital gains than you would pay on ordinary income. In 2008, the top rate on capital gains is 15%.If you’re in a lower tax bracket (10% or 15%), you’ll only pay 5% tax on any gain. In 2008 through 2010, the rate drops to zero for taxpayers in the 10% bracket or 15% bracket.Return to Questions
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