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Capital Gains Tax: Know This Before Selling Your Assets
What is a Capital Gains Tax?
A capital gains tax is a tax imposed on the sale of an asset. Assets can include stocks, bonds, real estate, or any other property that has increased in value since you acquired it.
How Much is the Capital Gains Tax?
The capital gains tax rate depends on how long you held the asset before selling it. Assets held for more than one year are subject to the long-term capital gains tax rate, which is lower than the short-term capital gains tax rate. The long-term capital gains tax rates for the 2023 and 2024 tax years are 0%, 15%, and 20%, depending on your taxable income. The short-term capital gains tax rate is the same as your ordinary income tax rate.
Conclusion
Understanding capital gains tax is essential if you plan to sell any assets that have increased in value. By being aware of the tax implications, you can make informed decisions about when and how to sell your assets to minimize your tax liability.
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