U.S. Long-Term Capital Gains Tax Rates (2023)

 The tax rate for long-term capital gains is typically lower than the rate for short-term gains, and it also depends on your country and tax bracket. In the U.S., long-term capital gains apply to assets held for more than one year, and the rates are generally more favorable.

U.S. Long-Term Capital Gains Tax Rates (2023)

• Long-term capital gains apply to assets held for more than one year.

• These gains are taxed at special rates that are lower than ordinary income tax rates.

  • 0% for lower-income earners (up to $44,625 for single filers, $89,250 for married couples filing jointly)

  • 15% for middle-income earners (for single filers making $44,626–$492,300, or $89,251–$553,850 for married couples filing jointly)

  • 20% for higher-income earners (for single filers making more than $492,300, or $553,850 for married couples filing jointly)

Example:

• If you’re in the 15% tax bracket for long-term capital gains, your long-term gains will be taxed at 15%, regardless of your income bracket for ordinary income.

• If your taxable income is below the 0% threshold, your long-term capital gains may be taxed at 0%.

Other Countries:

• Canada: Similar to short-term gains, 50% of long-term capital gains are taxable and added to your income, but the effective tax rate is often lower compared to short-term gains.

• U.K.: Long-term capital gains are taxed at 10% or 20% (or 18% or 28% for property).

• Australia: If you hold an asset for more than 12 months, you may receive a 50% discount on your capital gains tax.

Key Point:

• Long-term capital gains are typically taxed more favorably because governments encourage investment over longer periods. So, the longer you hold an asset, the less tax you may owe when you sell it.

Does this match your situation or do you need specific details for another country or scenario?