Are capital gains taxed as income?

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How are capital gains taxed? Are they taxed as part of the normal income or are they taxed separately using different rates and different calculations?

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score 0 · Answer 1 · 2013-04-21T09:26:38+00:00

It depends. Capital gains in the US are either long term or short term. Long term capital gains relate to assets that you were holding for more than a year while short term capital gains relate to gains made from the a sale of an that was held for less than a year.

Short term capital gains are taxed as income tax (at least at this moment). Long term capital gains are not taxed as income tax and the tax rate is actually lower. For example, for 2013 the tax rate is 20% for the higher tax rate band.