What Is the Capital Gains Tax?
Capital gains are the positive difference in the purchase price and the sale price of property. If the sale price exceeds the purchase price, the capital gain is considered a form of taxable income. Sales of real estate and stocks are common forms of capital gains. Conversely, there is no effect of capital losses on your income tax, meaning you do not receive a tax deduction if you lose money on your property. What Are the Capital Gains Tax Rates?Capital gains tax rates depend on several factors, including your current tax bracket and the length of time that you owned the property that has produced your capital gain. Usually, a property held for less than a year is considered ¿short term¿ and will be taxed at a higher rate than ¿long term¿ properties. Short term capital gains are often taxed at the same rate as ordinary income, but long term gains are taxed at a lower rate. Can an Attorney Help Me Lessen or Avoid Capital Gains Taxes?
Federal income taxation is a very complicated area of the law, and a tax attorney can help you manage your property and assets in a way that reduces your tax liability. An attorney can also help you protect your assets for your family once you are gone. |
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