Long-Term Capital Gain Rates
Long-term capital gain from sales of assets held for over one year is taxed at 0%, 15% or 20%, depending on the taxpayer’s taxable income.
- The brackets for long-term capital gains for 2020 and the projected 2021 rates are shown below. Long-term capital gains are subject to a lower tax rate, so investors may wish to consider holding on to assets for over a year to qualify for those rates.
| Long-Term Capital Gains Tax Rate | Single | Joint | Head of Household | |||
| 2020 | Projected 2021 | 2020 | Projected 2021 | 2020 | Projected 2021 | |
| 0% | $0 – $40,000 | $0 – $40,400 | $0 – $80,000 | $0 – $80,800 | $0 – $53,600 | $0 – $54,100 |
| 15% minimum income | $40,001 – $441,450 | $40,401 – $445,850 | $80,001 – $496,600 | $80,801 – $501,600 | $53,601 – $469,050 | $54,101 – $473,750 |
| 20% minimum income | Over $441,450 | Over $445,850 | Over $496,600 | Over $501,600 | Over $469,050 | Over $473,750 |
If you hold long-term appreciated-in-value assets, consider selling enough of them to generate long-term capital gains that can be sheltered by the 0% rate. The 0% rate generally applies to the excess of long-term capital gain over any short-term capital loss to the extent that, when added to regular taxable income, it is not more than the maximum zero rate amount (e.g., $80,000 for a married couple). If the 0% rate applies to long-term capital gains you took earlier this year for example, you are a joint filer who made a profit of $5,000 on the sale of stock held for more than one year and your other taxable income for 2020 is $75,000 then try not to sell assets yielding a capital loss before year-end, because the first $5,000 of those losses won’t yield a benefit this year. (It will offset $5,000 of capital gain that is already tax-free.)
