What Is Subject to Capital Gains Tax?

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What Is Subject to Capital Gains Tax?

The capital gains tax is really a tax on the appreciation value that builds up in investments. A capital investment can be a home, a business, artwork, or nearly anything that increases or decreases in value over a period of time. Almost half of all capital gains taxes are taxes on corporate stocks.

Things To Know

  • The tax rate for collectibles differs from the rate used for securities.

Some collectibles also qualify for capital gains taxes, including:

  • Art
  • Antiques
  • Metals/Gems
  • Stamps

For collectibles, however, the maximum tax rate on long-term capital gains is 28% rather than the 20% used for securities. Capital gains taxes do not apply to anything you sell regularly through your business, which is classified as inventory and taxed as profit.

Something to consider

Any property held for investment may be subject to capital gains taxes. You should consider the tax consequences when buying or selling capital gains property. Avoid future problems by keeping careful records of purchases and improvements to capital gains property.