![]() ![]() This means that if dividend-paying investments are held for more than a specified holding period, the payouts received may be subject to lower long-term capital gains tax rates. Long-term capital gains are also applied to qualified dividends. According to Charles Schwab, the maximum long-term capital gains rate rose to nearly 40% in the late 1970s for investors with bigger gains. The highest long-term capital gains tax rate is 20% but can either be 0% or 15% depending on income. The tax rates for long-term capital gains are determined based on income level and filing status and are comparatively lower than short-term capital gains. Long-term capital gains, on the other hand, apply to assets held for more than one year before being sold. This mainly depends on one’s income level and tax bracket. They are taxed at the same rates as your ordinary income tax rates, which can be up to 37%. Short-term capital gains occur when an asset is held for one year or less before being sold. Capital gains can be either short-term or long-term, depending on how long the asset was held before it was sold. For this reason, they are taxed differently than regular income. Capital gains can not be earned as an employee or from a business but are received due to the increase in value of an investment. These assets include stocks, bonds, real estate properties, precious metals, and other investments held for a specific period of time. You can skip our detailed analysis of capital gains taxes and the overall tax structure of different states, and go directly to read 10 States With the Lowest to Highest Capital Gains Tax Rate.Ĭapital gains tax is imposed on the profits or gains earned from the sale or disposal of certain types of assets known as capital assets. In this article, we will take a look at states with the lowest to highest capital gains tax rates. ![]()
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