Beginning
in 2001, a new maximum long-term capital gains tax rate of 20% (10% for
taxpayers in the 15% tax bracket) applies to all sales of capital assets.Long-term
capital gains are recognized on assets held for more than 12 months.
A
lower capital gains tax rate of 18% (8% for taxpayers in the 15% tax bracket)
applies if the individual has held the assets for more than five years.If
the individual is in a tax bracket higher than 15%, the five-year holding
period and hence the lower rate only apply to assets acquired after 12/31/00.However,
for individuals in the 15% tax bracket, this restriction on the date the
asset was acquired does not apply.
In determining how long an asset has been held, the taxpayer begins counting on the date after the day the property was acquired and includes the date of sale in the holding period.
The
above capital gains tax rates apply to individuals, estates and trusts.The
maximum capital gains tax rate for corporations remains 35%.
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