2018 Capital Gains Tax Rates — and How to Avoid a Big Bill

From: www.nerdwallet.com

All about long-term and short-term capital gains tax rates, including what triggers capital gains tax, how it’s calculated, and 6 ways to cut your tax bill.

In 2018 the capital gains tax rates are either 0%, 15% or 20% for most assets held for more than a year. Capital gains tax rates on most assets held for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35% or 37%).

Capital gains are the profits from the sale of an asset — shares of stock, a piece of land, a business — and generally are considered taxable income. A lot depends on how long you held the asset before selling.

• Short-term capital gains tax is a tax on profits from the sale of an asset held for one year or less. Short-term capital gains tax rates equal your ordinary income tax rate — your tax bracket. (Not sure what tax bracket you’re in? Review this rundown on federal tax brackets.)
• Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year. Long-term capital gains tax rates are 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.

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