Capital Gains Tax Rates and How to Calculate What You Owe for 2023
Long-Term Capital Gains
Long-term capital gains are taxed at lower rates than ordinary income. This is because the IRS recognizes that long-term investments represent a greater degree of risk than short-term investments, and that investors should be rewarded for taking on that risk.
Short-Term Capital Gains
Short-term capital gains are taxed as ordinary income. This is because the IRS views short-term investments as less risky, and therefore subject to a higher tax rate.
Conclusion
The capital gains tax rate that you pay will depend on your income and the length of time that you held the asset before selling it. If you are unsure of what your capital gains tax rate will be, it is important to speak with a tax advisor to get personalized advice.
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