Capital Gains Tax Rate for 2023 and 2024

Understanding the Tax Implications of Capital Gains

When selling assets such as stocks, bonds, or real estate, you may be subject to capital gains taxes. These taxes are levied on the profit or "gain" you make from the sale. The tax rate you pay will depend on how long you held the asset before selling it.

Long-Term Capital Gains Tax Rates

For assets held for more than one year, you qualify for long-term capital gains tax rates. These rates are significantly lower than ordinary income tax rates, offering a tax advantage to investors who hold their assets for the long term.

The long-term capital gains tax rates for 2023 and 2024 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

Short-Term Capital Gains Tax Rates

Assets held for one year or less are subject to short-term capital gains tax rates. These rates are the same as your ordinary income tax rates, resulting in a higher tax liability.

For 2023 and 2024, the short-term capital gains tax rates are as follows:

• 10% for taxpayers in the 10% tax bracket
• 12% for taxpayers in the 12% tax bracket
• 22% for taxpayers in the 22% tax bracket
• 24% for taxpayers in the 24% tax bracket
• 32% for taxpayers in the 32% tax bracket
• 35% for taxpayers in the 35% tax bracket
• 37% for taxpayers in the 37% tax bracket
• 39.6% for taxpayers in the 39.6% tax bracket