{"id":295,"date":"2025-03-19T06:50:18","date_gmt":"2025-03-19T06:50:18","guid":{"rendered":"https:\/\/www.tax1099.com\/glossary\/?p=295"},"modified":"2025-03-27T07:32:19","modified_gmt":"2025-03-27T07:32:19","slug":"capital-gains-tax","status":"publish","type":"post","link":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/","title":{"rendered":"Capital Gains Tax\u00a0"},"content":{"rendered":"

What is Capital Gains Tax?<\/span>\u00a0<\/span><\/h2>\n

Capital Gains Tax is the tax imposed on the profit earned from selling investments or assets. For example, selling stocks, real estate, or other taxable assets.\u00a0<\/span>\u00a0<\/span><\/p>\n

The amount it was purchased at, how long the holding period was (short-term or long-term), and the investor\u2019s income level or tax bracket all help determine the amount of tax owed. It can also include other payments such as broker fees, commissions, etc.<\/span>\u00a0<\/span><\/p>\n

\n

Short-Term & Long-Term Capital Gains<\/span>\u00a0<\/span><\/h2>\n

According to the IRS, CGT can be classified into two broad categories based on how long the asset is held<\/span>\u00a0<\/span><\/p>\n

Short-Term Capital Gains<\/h4>\n

If an investment is sold within one year of its purchase, the profits are taxed as ordinary income tax rates which range from 0% to 37% depending on the investor\u2019s tax bracket.<\/span>\u00a0<\/span><\/p>\n

Long-Term Capital Gains<\/h4>\n

If an investment is kept for more than one year before being sold, the profit is taxed at a lower tax rate which ranges from 0%, 15%, to 20%.<\/span> \u00a0<\/span>In some cases, high-income individuals may also be subject to an extra 3.8% Net Investment Income Tax (NIIT) on both short-term and long-term capital gains. This applies only if the gross income is over $200,000 for individuals and over $250,000 for married couples.<\/span>\u00a0<\/span><\/p>\n

\n

Capital Gains Tax Rate (2025)<\/span>\u00a0<\/span><\/h2>\n

Short-term capital gains are taxed according to ordinary income tax brackets. While, long-term capital gains are taxed at 0%, 15%, or 20%, based on the taxable income.<\/span>\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n
Status\/ Rates<\/th>\n0%<\/th>\n15%<\/th>\n20%<\/th>\n<\/tr>\n<\/thead>\n
Single<\/td>\nUp to $47,025<\/td>\n$47,025 to $518,900<\/td>\nApplies only to income above the 15% threshold<\/td>\n<\/tr>\n
Married & Filing Together<\/td>\nUp to $94,050<\/td>\n$94,050 to $583,750<\/td>\n<\/tr>\n
Head of Household<\/td>\nUp to $63,000<\/td>\n$63,000 to $551,350<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

What is Capital Gains Tax?\u00a0 Capital Gains Tax is the tax imposed on the profit earned from selling investments or assets. For example, selling stocks, real estate, or other taxable assets.\u00a0\u00a0 The amount it was purchased at, how long the holding period was (short-term or long-term), and the investor\u2019s income level or tax bracket all […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-295","post","type-post","status-publish","format-standard","hentry","category-c"],"yoast_head":"\nWhat Is Capital Gains Tax? Short-Term vs. Long-Term Rates<\/title>\n<meta name=\"description\" content=\"Selling assets? Find out how capital gains tax works, including short-term and long-term tax rates for 2025.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is Capital Gains Tax? Short-Term vs. Long-Term Rates\" \/>\n<meta property=\"og:description\" content=\"Selling assets? Find out how capital gains tax works, including short-term and long-term tax rates for 2025.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/\" \/>\n<meta property=\"og:site_name\" content=\"tax1099 - Glossary\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-19T06:50:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-27T07:32:19+00:00\" \/>\n<meta name=\"author\" content=\"sandeep\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"sandeep\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/\",\"url\":\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/\",\"name\":\"What Is Capital Gains Tax? Short-Term vs. Long-Term Rates\",\"isPartOf\":{\"@id\":\"https:\/\/www.tax1099.com\/glossary\/#website\"},\"datePublished\":\"2025-03-19T06:50:18+00:00\",\"dateModified\":\"2025-03-27T07:32:19+00:00\",\"author\":{\"@id\":\"https:\/\/www.tax1099.com\/glossary\/#\/schema\/person\/07c316feb07caf463e95097404c016eb\"},\"description\":\"Selling assets? Find out how capital gains tax works, including short-term and long-term tax rates for 2025.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.tax1099.com\/glossary\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Capital Gains Tax\u00a0\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.tax1099.com\/glossary\/#website\",\"url\":\"https:\/\/www.tax1099.com\/glossary\/\",\"name\":\"tax1099 - Glossary\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.tax1099.com\/glossary\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.tax1099.com\/glossary\/#\/schema\/person\/07c316feb07caf463e95097404c016eb\",\"name\":\"sandeep\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tax1099.com\/glossary\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/bbb7d1e2e2181097f91fb78b820549be?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/bbb7d1e2e2181097f91fb78b820549be?s=96&d=mm&r=g\",\"caption\":\"sandeep\"},\"sameAs\":[\"https:\/\/www.tax1099.com\/glossary\"],\"url\":\"https:\/\/www.tax1099.com\/glossary\/author\/sandeep\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What Is Capital Gains Tax? Short-Term vs. Long-Term Rates","description":"Selling assets? Find out how capital gains tax works, including short-term and long-term tax rates for 2025.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/","og_locale":"en_US","og_type":"article","og_title":"What Is Capital Gains Tax? Short-Term vs. Long-Term Rates","og_description":"Selling assets? Find out how capital gains tax works, including short-term and long-term tax rates for 2025.","og_url":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/","og_site_name":"tax1099 - Glossary","article_published_time":"2025-03-19T06:50:18+00:00","article_modified_time":"2025-03-27T07:32:19+00:00","author":"sandeep","twitter_card":"summary_large_image","twitter_misc":{"Written by":"sandeep","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/","url":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/","name":"What Is Capital Gains Tax? Short-Term vs. Long-Term Rates","isPartOf":{"@id":"https:\/\/www.tax1099.com\/glossary\/#website"},"datePublished":"2025-03-19T06:50:18+00:00","dateModified":"2025-03-27T07:32:19+00:00","author":{"@id":"https:\/\/www.tax1099.com\/glossary\/#\/schema\/person\/07c316feb07caf463e95097404c016eb"},"description":"Selling assets? Find out how capital gains tax works, including short-term and long-term tax rates for 2025.","breadcrumb":{"@id":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.tax1099.com\/glossary\/capital-gains-tax\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.tax1099.com\/glossary\/"},{"@type":"ListItem","position":2,"name":"Capital Gains Tax\u00a0"}]},{"@type":"WebSite","@id":"https:\/\/www.tax1099.com\/glossary\/#website","url":"https:\/\/www.tax1099.com\/glossary\/","name":"tax1099 - Glossary","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tax1099.com\/glossary\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.tax1099.com\/glossary\/#\/schema\/person\/07c316feb07caf463e95097404c016eb","name":"sandeep","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tax1099.com\/glossary\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/bbb7d1e2e2181097f91fb78b820549be?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/bbb7d1e2e2181097f91fb78b820549be?s=96&d=mm&r=g","caption":"sandeep"},"sameAs":["https:\/\/www.tax1099.com\/glossary"],"url":"https:\/\/www.tax1099.com\/glossary\/author\/sandeep\/"}]}},"_links":{"self":[{"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/posts\/295","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/comments?post=295"}],"version-history":[{"count":4,"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/posts\/295\/revisions"}],"predecessor-version":[{"id":959,"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/posts\/295\/revisions\/959"}],"wp:attachment":[{"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/media?parent=295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/categories?post=295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tax1099.com\/glossary\/wp-json\/wp\/v2\/tags?post=295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}