Capital Gains Rates in 2018

Taxes changed significantly with the new tax act for 2018.  Here we will briefly talk about short and long term capital gains under the new law.  This is meant to be a summary please do your own research if you have a significant portfolio or complexity.  Here is a good summary from the Motley Fool.

At a very high level:

  • stocks / ETF’s held > 1 year are considered long term gains / losses and taxed at more favorable (lower) capital gains rates
  • If they are held less than one year, they are treated as ordinary income, which is generally higher

For single filers in 2018, capital gains rates are 0% up to $38,600, 15% $38,600 – $425,800, and 20% over that.  The brackets are higher for joint filers.

Short term gains are treated as ordinary income; these brackets range from 10% to 24% in the likely relevant range.

There are different rules / impacts for minors (“Kiddie Tax”) which we will cover (at a high level) in a different post.


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