Question 1

What is the difference between short-term and long-term capital gains?

Accepted Answer

Short-term capital gains apply to assets held less than one year and are taxed as ordinary income (10-37%). Long-term gains on assets held over one year are taxed at preferential rates of 0%, 15%, or 20%.

Question 2

How can I reduce capital gains tax?

Accepted Answer

Hold investments for over a year for lower rates, use tax-loss harvesting to offset gains, contribute to tax-advantaged accounts, and consider the timing of your sales relative to your income.

Question 3

Is there a 0% capital gains rate?

Accepted Answer

Yes. For 2024, single filers with taxable income up to $47,025 and married filers up to $94,050 pay 0% on long-term capital gains.

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