When is Capital Gains Tax Due?
Understanding the Basics of Capital Gains Tax
When you sell a capital asset, such as a stock or a piece of property, you may be subject to capital gains tax. This tax is imposed on the profit you make from the sale of the asset. The amount of tax you owe will depend on several factors, including the length of time you held the asset and the type of asset you sold.When is Capital Gains Tax Due?
Capital gains tax is due when you file your annual tax return. The tax is due on the amount of capital gains you realized during the year. You must report all capital gains on your tax return, even if you do not owe any tax on them.How Much is Capital Gains Tax?
The amount of capital gains tax you owe will depend on your income and the length of time you held the asset. Long-term capital gains are taxed at a lower rate than short-term capital gains.For assets held for more than one year, the tax rates are as follows:
- 0% for taxpayers in the 10% and 12% tax brackets
- 15% for taxpayers in the 22%, 24%, 32%, 35%, and 37% tax brackets
- 20% for taxpayers in the 39.6% tax bracket
For assets held for one year or less, the tax rates are as follows:
- Your ordinary income tax rate for taxpayers in the 10% and 12% tax brackets
- Your ordinary income tax rate plus 10% for taxpayers in the 22%, 24%, 32%, 35%, and 37% tax brackets
- Your ordinary income tax rate plus 13.3% for taxpayers in the 39.6% tax bracket
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