Capital Gains Tax Rate 2022 with Seven Figure Income Explained

– Capital Gains Tax Rate 2022 –

This article seeks to analyse capital gains tax rate 2022. A capital asset is almost everything you own and employ for personal or investment purposes. You have a capital gain if you sell the asset for more than your adjusted basis. A home, personal-use things such as domestic furnishings, and stocks or bonds kept as investments are all examples. 

What is the Capital Gains Tax?

The capital gains tax is a tax imposed on the profit earned from an investment when it is sold.

The capital gains, or profits, are referred to as “realized” when stock shares or other taxable assets are sold.

The tax does not apply to unrealized capital gains or unsold assets, therefore stock shares will not be taxed until they are sold, regardless of how long they are kept or how much they increase in value.

The capital gains tax rate now applies only to income from the sale of assets held for more than a year, referred to as “long-term capital gains” under current federal tax legislation.

The rates range from 0% to 15% to 20%, depending on the taxpayer’s tax bracket for that year.

Short-term capital gains tax applies to assets held for a year or less, and are taxed as ordinary income. For most taxpayers, that is a higher tax rate than the capital gains rate. Capital gains tax rate 2022.

Understanding the Capital Gains Tax

Most taxpayers pay a higher rate on their income than they do on any long-term capital gains. This provides them with a financial incentive to keep investments for at least a year when profits are taxed at a reduced rate.

Day traders and others who profit from the convenience and speed of online trading should know profits earned from purchasing and selling assets held for less than a year are not only taxed but also taxed at a higher rate.

The total capital losses incurred in the year can offset the year’s taxable capital gains. To put it another way, you owe tax on the net capital gain.

Reportable net losses are limited to $3,000 per year, but any remaining losses can be carried forward to subsequent tax years. Capital gains tax rate 2022.

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What’s Considered a Capital Gain?

While the capital gains tax rates remained unchanged because of the Tax Cuts and Jobs Act of 2017, the amount of income required to qualify for each bracket increases each year to reflect rising wages.

The following are the details on capital gains rates for the tax years 2022 and 2022. Capital gains tax rate 2022.

Long-Term Capital Gains Tax Rates

A run down of long-term capital gains tax rates for both 2022, 2022 tax years.

Long-term Capital Gains Tax Rates for the 2022 Tax Year

FILING STATUS	0% RATE	15% RATE	20% RATE
Single	Up to $40,400	$40,401 – $445,850	Over $445,850
Married filing jointly	Up to $80,800	$80,801 – $501,600	Over $501,600
Married filing separately	Up to $40,400	$40,401 – $250,800	Over $250,800
Head of household	Up to $54,100	$54,101 – $473,750	Over $473,750

Long-term Capital Gains Tax Rates for the 2022 Tax Year

FILING STATUS	0% RATE	15% RATE	20% RATE
Single	Up to $41,675	$41,676 – $459,750	Over $459,750
Married filing jointly	Up to $83,350	$83,351 – $517,200	Over $517,200
Married filing separately	Up to $41,675	$41,676 – $258,600	Over $258,600
Head of household	Up to $55,800	$55,801 – $488,500	Over $488,500

For example, in 2021, individual filers won’t pay any capital gains tax if their total taxable income is $40,400 or below.

However, they’ll pay 15 percent on capital gains if their income is $40,401 to $445,850. Above that income level, the rate jumps to 20 percent.

Individual filers with total taxable income of $41,675 or less will not pay any capital gains tax in 2022. If their income is between $41,676 and $459,750, the capital gains rate rises to 15%.

The rate rises to 20% over that income level. Capital gains tax rate 2022.

Additionally, if the taxpayer’s income exceeds specific thresholds, the capital gains may be subject to the net investment income tax (NIIT), a 3.8 percent surcharge.

The income limits are determined by the filer’s status (individual, married filing jointly, etc.).

In the meantime, regular income tax brackets apply to short-term capital gains. Capital gains tax rate 2021.

The tax brackets for 2021 are ten percent, twelve percent, twenty-two percent, twenty-four percent, thirty-two percent, thirty-five percent, thirty-seven percent, thirty-seven percent, thirty-seven percent, thirty-seven percent, thirty-seven percent,

Unlike long-term capital gains taxes, short-term capital gains taxes have neither a 0% rate nor a 20% ceiling.

While capital gains taxes can be annoying, some of the best investments, such as stocks, allow you to skip the taxes on your gains as long as you don’t realize those gains by selling the position.

So, you could literally hold your investments for decades and owe no taxes on those gains. Capital gains tax rate 2022.

Short-Term Capital Gains Tax Rates

A rundown of short-term capital gains tax rates for both 2022, 2022 tax years.

2022 Short-Term Capital Gains Rates

Tax rates for short-term gains are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

Short-term gains are four assets held for one year or less – this includes short term stock holdings and short term collectibles.

2022 Short Term Capital Gains Tax Brackets
Tax Bracket/Rate	Single	Married Filing Jointly	Head of Household
10%	$0 – $9,950	$0 – $19,900	$0 – $14,200
12%	$9,951 – $40,525	$19,901 – $81,050	$14,201 – $54,200
22%	$40,526 – $86,375	$81,051 – $172,750	$54,201 – $86,350
24%	$86,376 – $164,925	$172,751 – $329,850	$86,351 – $164,900
32%	$164,926 – $209,425	$329,851 – $418,850	$164,901 – $209,400
35%	$209,426 – $523,600	$418,851 – $628,300	$209,401 – $523,600
37%	$523,601+	$628,301+	$523,601+

2022 Short-Term Capital Gains Rates

Tax rates for short-term gains are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

Short-term gains are four assets held for one year or less. This includes short-term stock holdings and short-term collectibles and crypto.

2022 Short Term Capital Gains Tax Brackets
Tax Bracket/Rate	Single	Married Filing Jointly	Head of Household
10%	$0 – $10,275	$0 – $20,550	$0 – $14,650
12%	$10,276 – $41,775	$20,551 – $83,550	$14,651 – $55,900
22%	$41,776 – $89,075	$83,551 – $178,150	$55,901 – $89,050
24%	$89,076 – $170,050	$178,151 – $340,100	$89,051 – $170,050
32%	$170,051 – $215,950	$340,101 – $431,900	$170,051 – $215,950
35%	$215,951 – $539,900	$431,901 – $647,850	$215,951 – $539,900
37%	$539,901+	$647,851+	$539,901+

How Capital Gains Taxes Work

Profits from the sale of a capital asset, such as stock, a business, a piece of land, or a work of art, are known as capital gains. Capital gains are usually included in taxable income, but they are taxed at a reduced rate in most situations.

When a capital asset is sold or exchanged at a price higher than its basis, a capital gain is realized. The acquisition price of an asset, plus commissions and the cost of renovations, less depreciation, is the basis.

When an asset is sold for less than its original cost, it is called a capital loss. Gains and losses are not adjusted for inflation like other types of capital income and expense. Capital gains tax rate 2021.

Long-term capital gains and losses occur when an asset is held for more than a year, while short-term capital gains and losses occur when the asset is held for less than a year.

Short-term capital gains are taxed at rates of up to 37 percent as ordinary income, whereas long-term profits are taxed at lower rates of up to 20 percent.

Long- and short-term capital gains are subject to an extra 3.8 percent net investment income tax (NIIT) for taxpayers with changed adjusted gross income above specific thresholds.

The Tax Cuts and Jobs Act (TCJA), which was signed into law at the end of 2017, kept the preferential tax rates on long-term capital gains and the 3.8 percent NIIT in place. Capital gains tax rate 2022.

For taxpayers with higher incomes, the TCJA separated the tax rate thresholds for capital gains from the tax rates for regular income.

We index the thresholds for the new capital gains tax brackets for inflation, but, as under prior law, the income thresholds for the NIIT are not. Capital gains tax rate 2022.

TCJA also eliminated the phaseout of itemized deductions, which had raised the maximum capital gains tax rate above the 23.8 percent statutory rate sometimes.

What is the Capital Gains Rate for 2022?

In 2022, the capital gains tax rates are 0%, 15%, or 20% for most assets held for more than a year.

Capital gains tax rates on most assets held for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, or 37%).

2022 Capital Gains Tax Rates

Tax-filing status	Single	Married, filing jointly	Married, filing separately,	Head of household
0%	$0 to $40,400	$0 to $80,800	$0 to $40,400	$0 to $54,100
15%	$40,401 to $445,850	$80,801 to $501,600	$40,401 to $250,800	$54,101 to $473,750
20%	$445,851 or more	$501,601 or more	$250,801 or more	$473,751 or more

What is the Capital Gains Exemption for 2022?

Exemption on Capital Gains

Example: Manya bought a house in July 2004 for Rs 50 lakh, and the full value of the consideration received in FY 2016-17 is Rs 1.8 crore.

Since this property has been held for over 3 years, this would be a long-term capital asset. The cost price is adjusted for inflation and the indexed cost of acquisition is taken.

Using the indexed cost of acquisition formula, the adjusted cost of the house is Rs 1.17 crore. The net capital gain is Rs 63, 00,000. Long-term capital gains are taxed at 20%.

For a net capital gain of Rs 63, 00,000, the total tax outgo will be Rs 12,97,800.

This is a significant amount of money to be paid out in taxes. This can be lowered by taking benefit of exemptions provided by the Income Tax Act on capital gains when profit from the sale is reinvested into buying another asset.

What is the CGT Allowance for 2023/2024?

The capital gains tax allowance in 2022-23 is £12,300, the same as it was in 2021-22. This is the amount of profit you can make from an asset this tax year before any tax is payable.

If your assets are owned jointly with another person, you can use both of your allowances, which can effectively double the amount you can make before CGT is due.

If you are married or in a civil partnership, you are free to transfer assets to each other with no CGT being charged. 

The table below explains your CGT allowance for the tax years 2021-22 and 2022-23.

Tax year	2021-22	2022-23
CGT allowance for an individual	£12,300	£12,300
Couple’s allowance (married or in a civil partnership only)	£24,600	£24,600

However, if you choose to transfer any of your assets to your partner, remember if you later sell the asset, you’ll be charged based on the gain made during the period it was owned by you as a couple, rather than since the asset was passed to your partner.

If you don’t fully use of your CGT allowance in a tax year, you aren’t allowed to carry it forward to the next.

Capital Gains and State Taxes

A historically large portion of the country’s wealth has been concentrated in the hands of a few individuals. As a result, millions of American families are poorer and have fewer chances than they would otherwise.

Furthermore, because the wealthiest are predominantly white, this great wealth concentration reinforces obstacles that make it more difficult for persons of color to advance.

Strengthening capital gains taxes — the earnings an investor gets when selling an item that has increased in value, such as stock, mutual funds, real estate, or artwork — is one-way states can promote more broadly shared wealth.

Strengthening capital gains taxes — the earnings an investor gets when selling an item that has increased in value, such as stock, mutual funds, real estate, or artwork — is one-way states can promote more broadly shared wealth.

Most state and local tax systems are upside down: the wealthy pay a smaller share of their income in these taxes, on average than low- and middle-income people do, even though they are best able to afford to pay more.

Capital gains, which go overwhelmingly to the wealthiest households, receive special tax preferences, such as a partial exemption, in several states. States with such preferences should eliminate them.

States also have several options to boost capital gains revenue to support investments that benefit the state.

How Are Capital Gains Taxed?

While the value of an item can increase year after year, capital gains are only taxed when the asset is sold.

Consider a taxpayer who purchased 100 shares of stock for $10 each (for $1,000) and then sold them for $15 each (for $1,500).

The $500 increase in value represents the amount of capital gains income that the taxpayer has “realized.” For tax, short-term capital gains are those that occur within a year of purchase; long-term gains are those that occur more than a year after purchase.

These capital gains are recorded and taxed as income under current state and federal law in the year they are realized.

The number of capital gains (and consequently the money collected by taxing them) varies by state and is mostly determined by the relative wealth of the state.

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Some States Have Tax Preferences for Capital Gains

Wealth-generating income, such as capital gains, is taxed at a lower rate than wages and salaries earned via labor by the federal government.

Only 23.8 percent of capital gains and stock dividends are taxed by the high-income taxpayers, who pay 40.8 percent on earned income but only 23.8 percent on capital gains and stock dividends.

Nine states — Arizona, Arkansas, Hawaii, Montana, New Mexico, North Dakota, South Carolina, Vermont, and Wisconsin — tax all long-term capital gains at a lower rate than regular income.

These tax benefits come in a variety of shapes and sizes.

Typically, these states enable taxpayers to deduct some or all of their capital gains income from their taxable income, although some charge a lower rate than the state tax on regular income or offer a credit equivalent to a percentage of the taxpayer’s capital gains.

In addition, a handful of states (including Colorado, Idaho, Louisiana, and Oklahoma) provide breaks only for capital gains on investments in in-state businesses, and a few states target preferences to investments in specific industries, like farming in Iowa and Wisconsin. Capital gains tax rate 2022.

Capital Gains Special Rates and Exceptions

Manya purchased a residence for Rs 50 lakh in July 2004, and the total value of the consideration received in FY 2016-17 is Rs 1.8 crore.

This property would be considered a long-term capital asset because it has been owned for over three years. The cost price is indexed and it adjusted the cost of procurement for inflation.

The house’s adjusted cost is Rs 1.17 crore, according to the indexed cost of acquisition method. A net capital gain of Rs 63,00,000 has been realized.

Long-term capital gains are subject to a 20% tax rate. The entire tax bill for a net capital gain of Rs 63,00,000 is Rs 12,97,800.

This is a substantial sum of money that will have to be paid in taxes.

We can reduce this by making use of capital gains exemptions allowed by the Income Tax Act when the profit from the sale is reinvested in the purchase of another asset. below are the capital gains exemptions allowed by the Income Tax Act:

1. Section 54: Exemption on Sale of House Property on Purchase of Another House Property

Section 54 capital gains exemption: Assesses can seek an exemption from long-term capital gains from the sale of house property by investing in up to two house properties instead of one house property with the same requirements.

The capital gains on the sale of a dwelling property shall not exceed Rs 2 crores.

The exclusion When capital gains from the sale of one house property are reinvested in the purchase or construction of two more house properties.

The exemption under section 54 is available (prior to Budget 2019, they limited the exemption of the capital gains to only 1 house property).

The capital gains exemption on two-house properties will be available just once in a taxpayer’s lifetime, assuming the capital gains do not exceed Rs. 2 crores.

The taxpayer must invest the number of capital gains, not the total selling proceeds.

If the cost of acquisition of the new property is higher than the number of capital gains, the exemption shall be limited to the total capital gain on the sale.

Conditions for availing of this benefit:

They can purchase the new property either year before or two years after I sell the previous property.

The profits can also build a home, but the work must be finished within three years of the sale date.

Only one residential property can be purchased or constructed from capital gains to claim this deduction, according to the 2014-15 Budget.

Please keep in mind that this exemption can be revoked if the new property is sold within three years of its purchase or completion. Capital gains tax rate 2022.

2. Section 54F: Exemption on Capital Gains on Sale of any Asset Other than a House Property

When capital gains from the sale of a long-term asset other than a home property are available, an exemption under Section 54F is possible.

To qualify for this deduction, you must invest the wholesale price, not just the capital gain, in the new residential home property.

Purchase the new property one year before or two years after they sold the previous property. You might also put the profits toward the construction of a home.

The construction, however, must be completed within three years of sale.

Only one home property can be purchased or erected from the sale consideration to claim this deduction, according to Budget 2014-15.

We sold if this new property within three years of purchase, it will revoke the exemption. If it invested the entire sale proceeds towards the new house, the entire capital gain will be exempt from taxes if you meet the above-said conditions.

However, if you invest a portion of the sale proceeds, the capital gains exemption will be in the proportion of the invested amount to the sale price = capital gains x cost of new house/net consideration. Capital gains tax rate 2021.

3. Section 54EC: Exemption on Sale of House Property on Reinvesting in Specific Bonds

The exemption is available under Section 54EC when capital gains from the sale of the first property are reinvested into specific bonds.

If you don’t want to put your profit from the sale of your first property into another, you can put it in bonds issued by the National Highway Authority of India (NHAI) or the Rural Electrification Corporation for up to Rs. 50 lakhs (REC).

The money invested can be redeemed after three years, however, it cannot be sold before that time has passed. The three-year period has been prolonged to five years as of FY 2018-2019; the homeowner now has six months to invest the profit in these bonds.

However, you must invest before the tax filing date to be eligible for this benefit.

How Do I Calculate Capital Gain on the Sale of Property?

The first step in how to calculate long-term capital gains tax is to find the difference between what you paid for your property and how much you sold it for—adjusting for commissions or fees.

Depending on your income level, your capital gain will be taxed federally at either 0%, 15%, or 20%. Capital gains tax rate 2022.

How to Figure Long-Term Capital Gains Tax

Let’s take a closer look at the mechanics of long-term capital gains tax calculation. Keep in mind that the aforesaid capital gain rates apply to assets held for more than a year.

Profits earned on assets kept for less than a year (short-term capital gain) are taxed as ordinary income. Gains on certain types of sales, such as rental real estate and collectibles, may also be taxed differently.

How to Calculate Capital Gains Tax

A detailed guide on how to calculate capital gains tax:

➢ Determine your basis. This is the purchase price, plus any commissions or fees paid. The basis may also be increased by reinvested dividends on stocks and other factors.

➢ Determine your realized amount. This is the sale price minus any commissions or fees paid.

➢ Subtract your basis (what you paid) from the realized amount (how much you sold it for) to determine the difference.

➢ If you sold your assets for more than you paid, you have a capital gain.

➢ If you sold your assets for less than you paid, you have a capital loss. Learn how you can use capital losses to offset capital gains.

➢ Review the list below to know which tax rate to apply to your capital gains.

Determine Your Long-Term Capital Gains Rate

The federal tax rate for your long-term capital gains is taxed depending on where your income falls in relation to three cut-off points.

➢ 0% of your income is below $37,950 and you are filing as a single (or below $75,900 for married filing jointly)

➢ 15% of your income is between $37,951 and $418,400 and you are filing as a single (or between $75,901 and $470,700 for married filing jointly)

➢ 20% of your income is over $418,400 and you are filing as single (or over $470,700 for married filing jointly)

2018 Long-Term Capital Gain Rates

➢ 0% of your income is below $38,700 and you are filing as single (or over $77,400 for married filing jointly)

➢ 15% of your income is between $38,701 and $500,000 you are filing as single (or between $77,401 and $600,000 for married filing jointly)

➢ 20% of your income is over $500,000 and you are filing as single (or over $600,000 for married filing jointly).

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Advantages of Long-Term Capital Gains

Profit generated on capital assets such as securities and real estate is referred to as a capital gain. A capital gain occurs when an investor buys a capital asset for a specific price and then sells it for a greater price.

When a capital asset is sold for a profit, a capital gains tax is imposed. Depending on their specific tax demands, many investors use smart tactics to take a capital gain or loss.

Depending on the taxpayer’s tax situation, capital gains taxes offer both advantages and disadvantages.

Tips

Some advantages of the capital gains tax are that you can defer it until you sell your asset and that you may pay less tax if it’s a long-term gain vs. a short-term gain.

Downsides include profit reduction, a higher tax rate for short-term gains, and double taxation. Capital gains tax rate 2021.

1. Tax Deferment

Capital gains taxes have the benefit of deferring tax payments until the asset is sold. A real estate investor, for example, does not pay taxes on the equity gained in a property investment until the year he sells it for a profit.

Furthermore, until he receives a distribution or sells the assets, a securities investor does not pay capital gains taxes on earnings generated from stocks and bonds.

Investors only pay taxes during the year in which they make a profit. This differs from income taxes, which require you to pay a tax each time you receive a paycheck.

2. Profit Reduction

According to the Internal Revenue Service, nearly everything you own for personal use or investment purposes is a capital asset.

A drawback to owning capital assets is that if they are sold for profit, the IRS requires that you report gains as income. The disadvantage of this tax is that it can reduce the overall profits realized from the sale of the asset.

3. Tax Rates

The amount of taxes you must pay on a capital gain is determined by how long you had the asset before selling it, and it can be beneficial or harmful to the taxpayer.

You have a long-term capital gain if you possessed the asset for over 12 months and made a profit, which is taxed at a reduced rate.

You have a short-term capital gain if you own an asset for less than 12 months and sell it for a profit, which is taxed at a higher rate. Because the rate is often lower, long-term capital gains taxes are preferable to short-term capital gains taxes.

For 2018, long-term capital gains tax rates vary between 0 and 20 percent, depending on the taxpayer’s income tax bracket.

For example, those in the 10 or 15 percent tax brackets pay a long-term capital gains rate of 0 percent, while those in the 39.6 percent bracket pay the full 20 percent. Certain special categories have their own capital gains rates.

For example, it tax an unrecaptured section 1250 gain at 25 percent; It taxed gains on collectibles and certain types of small business stock at 28 percent, while short-term capital gains are always taxed at ordinary income rates.

You can use tax losses to offset capital gains and up to $3,000 of ordinary income. However, if you’re selling stock to capture a tax loss, avoid buying it back within 30 days, or they will disallow the loss per IRS wash sale rules. Capital gains tax rate 2022.

4. Double Taxation

Taxpayers pay federal, and most times, state capital-gains taxes.

Property owners and investors, for example, must report capital gains from the sale of real estate on both federal and state income tax returns in most states. The additional tax on the state level is a disadvantage for many taxpayers.

Capital Gains Tax FAQs

We’ve put together a collection of Capital Gains FAQs to assist you to maximize your gains.

QUES: Are Capital Gains Considered Income?

Earned income includes earnings, salaries, and tips, and it is something that almost everyone is familiar with.
 
Unearned income is money received in other ways that is not considered remuneration. Pension income, capital gains, annuity payments, unemployment, and interest income are some of these sources.
 
While all earned and unearned income streams are taxable, unearned income may be taxed at a reduced rate, such as taxes on long-term capital gains. Short-term capital gains, on the other hand, will be taxed at your regular rate.

QUES: Are Dividends Capital Gains?

Dividends fall into one of two categories with taxation: unqualified and qualified dividends.
 
Unqualified dividends, which are common in most common and preferred stocks, are taxed at regular federal income tax rates, which vary from 10% to 37%.
 
Qualified dividends are taxed at the taxpayer’s capital gains rate, which can be anywhere from 0% to 23.8 percent (including Net Investment Income Tax).
 
A dividend must meet the following criteria to be eligible for the reduced tax rate:
 
➢ A corporation in the United States or a qualifying foreign entity.
 
➢ Not on the IRS’s non-qualifying list.
 
➢ For common stock, the investor must hold the shares for at least 60 days, and for preferred stock, the investor must hold the stock for at least 90 days.
 
➢ Real estate investment trusts (REITs), master limited partnerships, employee stock options, and tax-free corporations pay dividends that are automatically exempt from eligible dividend treatment.

QUES: How Do Capital Gains Tax Work?

Only when a taxpayer sells an asset does he or she realize a capital gain. Although the asset’s value may rise dramatically, you will not be subject to capital gains tax when you sell it.
 
By owning an asset for longer than a year, taxpayers can significantly lower their capital gains taxes.

QUES: What Is the Capital Gains Rate?

Capital gains rates have fluctuated over the years. They accounted for 15% of the population in 1913. They had nearly doubled to 29.19 percent in 1993.
 
The long-term capital gains tax rates have altered again, some 30 years later, according to the Tax Cuts and Jobs Act (TCJA). They used to be tied to ordinary income tax brackets, but now they have their own set of brackets.

QUES: What Is Capital Gains Tax on Real Estate?

Capital gains taxes are only due on the sale of a real estate asset.
 
Consider the following capital gain scenario: a taxpayer paid $500,000 for an investment property and claimed $100,000 in depreciation over the holding period.
 
As a result, the adjusted basis is $400,000. The property is now sold for $600,000, resulting in a capital gain of $200,000 for the taxpayer.
 
It’s worth noting that $100,000 of this $200,000 gain will be taxed as depreciation recapture.

QUES: How Much Is Capital Gains Tax On Inherited Property?

It would be a tremendous stroke of luck to inherit a Rembrandt or a Picasso. Most individuals are unlikely to witness such pieces of art outside of a museum.
 
However, inheriting a home from a relative is extremely likely. The first item to keep in mind is the tax basis, which is the value used to compute the gain when you sell a property.
 
The IRS has established that the tax basis in circumstances of inheritance is the value on the decedent’s death date. The tax basis, for example, is $500,000 if the property’s fair market value is $500,000 when the individual dies.
 
It makes no difference if the purchase price was $100,000 a quarter-century ago. As a result, the tax base of the beneficiary is “stepped-up.” If the inheritor sells the property for $525,000, only $25,000 will be subject to capital gains tax.

Finally, while the value of an asset can increase in each year that it is owned, the capital gain is taxed only when the asset is sold. Under current state and federal law, these capital gains are reported and taxed as income in the year that they are realized.

Remember to share his article with friends and loved ones. Also, feel free to drop your comment and questions in the comment box below.

StudentsandScholarship Team.