What are the possible maximum tax rates for Long-Term Capital Gains (LTCG)?
Understand the Problem
The question is asking about the possible maximum tax rates for Long-Term Capital Gains (LTCG) in the context of a shareholder receiving nondividend treatment for a portion of a distribution. You need to identify the correct range of possible maximum LTCG tax rates from the options provided.
Answer
Long-term capital gains are taxed at 0%, 15%, or 20%, with a possible maximum of 28% for small business stock.
Long-term capital gains (LTCG) are generally taxed at 0%, 15%, or 20%, depending on your income. However, gains from selling qualified small business stock can be taxed at a maximum rate of 28%.
Answer for screen readers
Long-term capital gains (LTCG) are generally taxed at 0%, 15%, or 20%, depending on your income. However, gains from selling qualified small business stock can be taxed at a maximum rate of 28%.
More Information
Long-term capital gains are profits from selling assets held for more than a year. The specific tax rate depends on your taxable income and filing status.
Tips
A common mistake is forgetting that certain types of assets, like small business stock, may be subject to different capital gains tax rates.
Sources
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