Q:

What are the tax rates on long-term capital gains?

A:

Quick Answer

The rate on long-term capital gains taxes depends upon the individual’s income level, according to Bankrate. The American Taxpayer Relief Act of 2012 increased the long-term capital gains tax to 20 percent for above-average income earners.

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Full Answer

The Internal Revenue Service defines capital assets as anything individuals own for investment purposes, such as stocks, bonds and real estate investment properties. Any investment instrument is subject to capital gains taxes. The IRS classifies capital gains as any income earned from capital assets, and the IRS taxes that income using short- and long-term capital gains taxes. Most taxpayers do not pay more than 15 percent in capital gains taxes as of 2015, explains the IRS.

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