This information accompanies the recent blog, “Uncertainty further complicates tax planning for incentives.”

Type of Gain / Rate*

* In addition, the 3.8% net investment income tax (NIIT) applies to net investment income to the extent that modified adjusted gross income (MAGI) exceeds $200,000 (singles and heads of households), $250,000 (married filing jointly) or $125,000 (married filing separately).

Short-term (assets held 12 months or less)

Taxpayer’s ordinary income tax rate

Long-term (assets held more than 12 months)

15%

Some Key Exceptions

Long-term gain of certain high-income taxpayers

20% (The 20% applies only to those with taxable income exceeding $441,450 (singles), $469,050 (heads of households), $496,600 (joint filers), or $248,300 (separate filers).

Most long-term gain that would be taxed at 10% or 12% based on the taxpayer’s ordinary-income rate

0%

Long-term gain on collectibles, such as artwork and antiques

28%

Long-term gain attributable to certain recapture of prior depreciation on real property

25%

Gain on qualified small business (QSB) stock held more than 5 years

• Acquired before Feb 18, 2009
  • 14% (Effective rate based on a 50% exclusion from a 28% rate).
• Acquired on or after Feb 18, 2009, and before Sept 28, 2010
  • 7% (Effective rate based on a 75% exclusion from a 28% rate).
• Acquired on or after Sept 28, 2010
  • 0%

Have questions or need to learn more about how the capital gains tax will affect your business? Contact an IMC professional today!