What is the Capital gains tax rate?
The capital gains tax rate is the federal income tax rate applied to profits from selling capital assets such as stocks, mutual funds, and other investments. Long-term gains from assets held more than one year are taxed at preferential rates of 0%, 15%, or 20% based on taxable income, while short-term gains from assets held one year or less are taxed at ordinary rates up to 37%. The 3.8% net investment income tax applies to high earners with MAGI above the thresholds, and capital losses offset gains under specific ordering rules. Pairing realizations with Tax loss harvesting plans improves the outcome.
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