Tax Tip of the Week
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For the week of
October 30, 2000
The capital gain tax rates change, starting in 2001
In general, long-term capital gains are taxed at 20% for taxpayers
in the upper regular tax brackets (28% to 39.6%) and at 10% for those in the 15% regular tax bracket. These rates
apply to assets held for more than 12 months.
Starting January 1, 2001, there will be an additional rate of 18% for upper-bracket taxpayers and an 8% rate for
those whose regular income is taxed in the 15% bracket. For taxpayers in the upper brackets, the 18% rate will
apply to assets held more than five years and acquired after December 31, 2000. (There is a special election that
will allow pre-2001 assets to be treated as though they were acquired on January 1, 2001.) Taxpayers in the 15%
bracket will not have to acquire the asset after December 31, 2000, to apply the five-year holding period and use
the 8% rate.
All this can be a bit confusing. Don't feel embarrassed to ask questions about how the tax law affects you. The
tax laws get more complicated every time Congress passes a "tax simplification act." If you have questions
about the new capital gains rates or if you would like to discuss planning strategies utilizing them, give us a
call.
Contact us for all your tax planning needs. You don't need to be a current client of our firm to call. We are a
growing firm and we appreciate seeing new clients.
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and current tax information.
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