Investor Education | The best tax rate on capital gains

Currently, long term capital gains from sales of securities are generally taxed at a maximum 15% rate (20% for certain high-income investors). But some investors do even better.

A 0% rate—that’s right, no misprint—applies to investors in the two lowest regular income tax brackets of 10% and 15%. If your long-term gains take you to the top of the 15% bracket but you do not cross the threshold, you do not owe any tax on those gains in 2016. For example, the upper threshold for a joint filer in the 15% tax bracket in 2016 is $75,300. If you earn $60,000 in salary, you can realize a $15,300 capital gain and pay zero tax on that gain.

This newsletter/advertisement is produced for our clients, friends and associates through an arrangement with WPI Communications, Inc. for the representatives’ use. Although the editorial content is professionally researched, written and edited, neither our firm nor any of its agents, representatives or associates make any representations regarding the accuracy of the content or its applicability to your situation. The information in this communication is not intended as tax or legal advice. In accordance with IRS Circular 230, the information provided herein may not be relied on for purposes of avoiding any federal tax penalties. Any tax advice contained in the body of this material was not intended or written to be used, and cannot be used, by the recipient for the purpose of 1) avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, or 2) promoting, marketing or recommending to another party any transaction or matter addressed herein. You are encouraged to seek tax or legal advice from an independent advisor.

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