In general exempted (except in some specific cases)īosnia and Herzegovina (Last reviewed 21 April 2023) Generally, the Investment Income Tax for capital gains is 10%.Īrgentina (Last reviewed 22 February 2023)ġ0 or 20 (depending on the type of property and whether sold to a tax agent or individual)Ĭapital gains are subject to the normal PIT rate.Īzerbaijan (Last reviewed 23 February 2023)Ĭapital gains are subject to the normal profit tax rate.īarbados (Last reviewed 14 February 2023)Ĭapital gains are subject to the normal CIT rate (except capital gains on shares under certain conditions). Headline individual capital gains tax rate (%)Ĭapital gains are subject to the normal CIT rate.Ĭapital gains arising from the disposal of financial instruments: 10% If you have questions or want more information about how long-term capital gains and qualified dividends are taxed under the TCJA, contact your tax advisor.Headline corporate capital gains tax rate (%) In a nutshell, the new law keeps the same tax rates for long-term capital gains and qualified dividends, but the rate brackets are no longer tied to the ordinary-income tax brackets for individuals. (Under prior law, the kiddie tax was calculated using the marginal rates paid by the parents of affected children and young adults.) The kiddie tax can potentially apply until the year that a dependent young adult turns age 24. So, for 2018 through 2025, the tax rates for higher-income people who recognize long-term capital gains and dividends will actually be 18.8% (15% + 3.8% for the NIIT) or 23.8% (20% + 3.8% for the NIIT).įor 2018, the brackets for trusts and estates that collect long-term capital gains and qualified dividends are as follows:įor 2018 through 2025, the TCJA stipulates that these trust and estate rates and brackets are also used to calculate the so-called “kiddie tax” when it applies to long-term capital gains and qualified dividends collected by dependent children and young adults. The new tax law also retains the 3.8% NIIT. Here are the 2018 brackets for long-term capital gains and qualified dividends:Īfter 2018, these brackets will be indexed for inflation. However, for 2018 through 2025, these rates have their own brackets that are not tied to the ordinary-income brackets. The TCJA retains the 0%, 15% and 20% rates on long-term capital gains and qualified dividends for individual taxpayers. So, many people actually paid 18.8% (15% + 3.8% for the NIIT) or 23.8% (20% + 3.8% for the NIIT) on their long-term capital gains and dividends. In addition, higher-income individuals with long-term capital gains and dividends were also hit with the 3.8% net investment income tax (NIIT). And, if they fell within the maximum 39.6% ordinary-income bracket, they were taxed at the maximum 20% rate. If they fell within the 25%, 28%, 33% or 35% ordinary-income brackets, they were taxed at 15%. Specifically, if the long-term capital gains and/or dividends fell within the 10% or 15% ordinary-income brackets, no federal income tax was owed. The rate brackets were tied to the ordinary-income rate brackets.
Prior to the TCJA, individual taxpayers faced three federal income tax rates on long-term capital gains and qualified dividends: 0%, 15% and 20%.
Here’s what you should know if you plan to sell long-term investments or expect to receive dividend payments from your investments. Are you confused about the federal income tax rates on capital gains and dividends under the Tax Cuts and Jobs Act (TCJA)? If so, you’re not alone.
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