Question

Annette is currently in the 25% marginal tax bracket. She had a long-term capital gain from the sale of stock and another capital gain from a coin collection. Assuming that the combined gains are not large enough to push her into a higher marginal bracket, she will be taxed _____% on the gain from the sale of stock and _____% on the gain from the coin collection.

Answer 1

Answer:

Annette's long term capital gains are taxed at 15% rate.

Short term capital gains are taxed as gross income, therefore Annette will be taxed at 25% rate.  

Explanation:

Capital gains are taxed at 0%, 15% or 20%, depending on your taxable income and filing status. Most taxpayers fall under the 15% rate (yearly income between $39,376 to $434,550). Since Annette's current tax bracket is 25% (should be 24% instead) her income is between $84,201 to $160,725, so she also falls under the 15% long term capital gains tax rate.