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What Is Subject to Capital Gains Tax?

Photo of a House on Top of Money

The capital gains tax is really a tax on the appreciation value that builds up in investments. A capital investment can be a home, a business, artwork, or nearly anything that increases or decreases in value over a period of time. Almost half of all capital gains taxes are taxes on corporate stocks.

Some collectibles also qualify for capital gains taxes, including:

  • Art
  • Antiques
  • Metals/Gems
  • Stamps

For collectibles, however, the maximum tax rate is 28% rather than the 5–15% used for securities. Capital gains taxes do not apply to anything you sell regularly through your business, which is classified as inventory and taxed as profit.

Any property held for investment may be subject to capital gains taxes. You should consider the tax consequences when buying or selling capital gains property. Avoid future problems by keeping careful records of purchases and improvements to capital gains property.

This article provided by The Educated Investor and powered by CalcXML.
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