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Could You Pay Zero Capital Gains Tax?

Capital gains are the gain you earn after you have sold an asset which is usually real or security. The tax rate federal you pay for capital gains will be based on the kind of asset you are selling and the length of time it was held prior to selling. If you owned the security for a calendar year or less than that time period the gains are considered to be short-term and are taxed according to the normal income tax rates that are for the year in which it was held. 

The amount you pay tax is determined by your income and is currently ranging from 10 to 35 percent. If you own an investment for more than one full year, you can qualify for a better capital gain tax rate over the long term that is based on the tax bracket that you are in. You can know more about capital gain tax via inheritance-tax.co.uk/area/inheritance-tax/.

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Your holding period is calculated starting from the day the purchase of the security until the date that you sold. This is how the zero-percent tax rate is in the picture. If your income total, including capital gains, places you within that tax bracket between 10 and 15 percent then you are eligible for the tax rate of zero percent rate for long-term gains. 

If you're in one of the lowest income tax brackets you're eligible for tax-free status without a second thought. Tax-free is a huge benefit many households with higher incomes have discovered ways to benefit from this tax break. Let it be those in the top 1% who can afford tax experts to discover the loopholes. 

 

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