The capital gains tax calculator is a quick way to compute the gains on the transfer or sale of a capital asset for the tax year 2022 (filing in 2023) and tax year 2021. This capital gains tax calculator will compute gains on every kind of asset that you have sold or transferred during the tax year 2022 or tax year 2021.
Capital Gains Tax Calculator 2022 & 2023
What are capital gains?
As you know, everything you own as personal or investments- like your home, land or household furnishings, shares, stocks or bonds- will fall under the term ” capital asset”. IRS will charge you tax on the gains if you sell or transfer or barter the said capital asset. For knowing more on capital gains, please refer IRS Publication 544, Sales and Other Dispositions of Assets;
What are the types of capital gains?
The tax rates on capital gains are based on types of capital assets which is determined on the basis of the period of holding of a capital asset. There are two types of capital gains=short term capital gains and long term capital gains
What is Short Term Capital Gains Tax ?
If you hold the capital assets for less than 12 months before its sale, the gain or loss on sale of such a capital asset is short term capital gains or loss, as the case may be. The short term capital gains are taxed at the same tax rate that applies to your normal income, as there is no special tax rate for short term capital gains. In other words, the rate of tax on short term capital gains is the same tax bracket that applies for your normal income.
What are Long Term Capital Gains?
Similar to short term capital asset , there are long term capital assets. if you hold the capital asset for twelve months or more, the capital asset is regarded as long term capital asset. When you sell or transfer the long term capital asset, the gain or loss shall be regarded as long term capital gains or loss. There is a special tax rate for long term capital gains.
Long Term Capital Gains Tax Rates 2023
| Tax Rate | For Unmarried Individuals, Taxable Income Over | For Married Individuals Filing Joint Returns, Taxable Income Over | For Heads of Households, Taxable Income Over |
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $44,625 | $89,250 | $59,750 |
| 20% | $492,300 | $553,850 | $523,050 |
2022 Federal Capital Gains Tax Rate
| Rate | For Unmarried Individuals, Taxable Income Over | For Married Individuals Filing Joint Returns, Taxable Income Over | For Heads of Households, Taxable Income Over |
| 0% | $0 | $0 | $0 |
| 15% | $41,675 | $83,350 | $55,800 |
| 20% | $4,59,750 | $5,17,200 | $4,88,500 |
Short Term Capital Gains vs Long Term Capital Gains
Internal Revenue Code obviously gives lots of relief to gains from the sale or transfer of long-term capital assets. So here are pointed comparisons between short term capital gains and long term capital gains as far as the tax burden is concerned.
- Short term capital gains are taxed at the same tax rate that is applied to your normal income. In other words, if you are falling in the 28% tax bracket, short term capital gains in your hand will be taxed @ 28%.
- Long term capital gains are taxed on lower rates -the maximum is 20%.
- In case of long term capital gains on the sale of a home after using it as a primary residence for at least two years out of 5 years, you are eligible to claim capital gains exemption up to $2,50,000 if you are single ($2,50,000 in case filing returns jointly). Check out the real estate capital gains calculator
Is there any special capital gains tax on real estate sales?
The answer is no. The tax rate on capital gains on the sale of real estate is the same for every other asset classified as long term capital asset or short term capital tax. In other words, whether you earn long term capital gains on real estate or stock investment sales, the tax rate will be the same. Have you tested our 1031 exchange calculator that can tell you much tax can be deferred on long term capital gains?
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While the information on this site - Internal Revenue Code Simplified-is about legal issues, it is not legal advice or legal representation. Because of the rapidly changing nature of the law and our reliance upon outside sources, we make no warranty or guarantee of the accuracy or reliability of information contained herein.