This is a quick calculator for computing the capital gains tax for the tax year 2019 and 2020 . 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 the said capital asset. For knowing more on capital gains, please refer IRS Publication 544, Sales and Other Dispositions of Assets;
Different Tax rates for short & long term capital gains!
The tax rates for capital gains are based on the period of holding of a capital asset. If you hold the 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 maybe. Similarly ,if the capital asset is held for twelve months or more, sale of that capital asset shall generate long term long term capital gains (or loss ) .
2021 Capital Gains Calculator
Short Term Capital Gains vs Long Term Capital Gains
Internal Revenue Code obviously give lots of relief to gains out of sale or transfer of long term capital assets. So here are pointed comparison between short term capital gains and long term capital gains as far as 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 28% tax bracket, short term capital gains in your hand will be will be taxed @ 28%.
- Long term capital gains are taxed on lower rates -maximum is 20%.You can refer the capital gains rate for 2019 and long term capital gains rates 2020
- In case of long term capital gains on sale of a home after using it as primary residence for at least 2 years out of 5 years , you are eligible to claim exemption upto $2,50,000 if you are single,($2,50,000 in case filing returns jointly). Checkout the real estate capital gains calculator
Have you tested our 1031 exchange calculator that can tell you much tax can be deferred on long term capital gains