Google trend - LTCG tax

LTCG tax - 10 things to know with detail

• LTCG stands for Long-Term Capital Gains, which refers to the profit earned from the sale of an asset that has been held for more than one year.
• LTCG tax is a tax imposed on the profit earned from the sale of long-term assets such as stocks, bonds, real estate, and other investments.
• In the United States, LTCG tax rates are generally lower than short-term capital gains tax rates. The LTCG tax rates range from 0% to 20% depending on the taxpayer's income level.
• To qualify for the lower LTCG tax rates, the asset must have been held for more than one year before being sold.
• The calculation of LTCG tax is based on the difference between the purchase price of the asset and the selling price, also known as the capital gain.
• There are some exemptions to LTCG tax, such as the sale of a primary residence for a profit of up to $250,000 for individuals ($500,000 for married couples).
• Certain types of investments, such as qualified small business stock and qualified dividends, may also be eligible for lower LTCG tax rates.
• Taxpayers can offset capital losses against capital gains to reduce their overall tax liability. If capital losses exceed capital gains, taxpayers can carry forward the excess losses to offset gains in future years.
• The IRS requires taxpayers to report capital gains and losses on Schedule D of their tax return. Failure to report capital gains may result in penalties and interest.
• It is important for taxpayers to consult with a tax professional or financial advisor to understand their specific tax situation and optimize their tax planning strategies related to LTCG tax.