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Capital gains tax

Tax Cuts and Jobs Act of 2017: Capital Gains Taxation

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

Capital gains taxes have remained basically the same. Short-term capital gains (assets held less than one year) are still taxed as ordinary income. However, long-term capital gains tax rates are now based on the following taxable income levels, instead of on the old marginal tax brackets:

Long-Term Capital Gains Rate Single Return Taxable Income Joint Return Taxable Income
0% for taxable income up to $38,600 $77,200
15% for taxable income up to $425,800 $479,000
20% for taxable income up to $425,800 $479,000

 

It is important to note that alternative minimum tax rates still apply to long-term capital gains. In 2018, an alternative minimum tax of 28% will apply to any alternative taxable income (including long-term capital gains) in excess of $95,750 for single returns and $191,500 for joint returns.

Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 22, 2018
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How has the capital gains tax changed, and how does it affect me?

By Tax Law

In the Tax Cuts and Jobs Act of 2017 signed into federal law in December, the American tax code underwent many changes. However, the capital gains tax structure has, for the most part, stayed the same.

Short-term capital gains, on assets held for a year or under, maintain their taxing status as ordinary income. Long-term capital gains, for assets held for more than a year, maintain their status as taxed based on tax bracket: 0%, 15%, or 20%.

The biggest difference to note here is that the income thresholds for many tax brackets have been raised; thus, the marginal tax rates have been lowered, and in general, this has resulted in short-term capital gains tax cuts.

October 4, 2018
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