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Short and Long Term Capital Gains Tax Rates:

Of course there are several factors we have to consider. The amount the investor is taxed depends on his or her tax bracket, and the amount of time the investment was held before being sold.

Short Term Capital Gains
Short term capital gains are classified as an investment held for one year or less. This category taxes the investor at his or her ordinary tax rate.

Long Term Capital Gains
Long term capital gains are classified as an investment held for more than one year or longer. This category is taxed at a lower rate than short term capital gains. If you happen to be in the lowest two income tax brackets then the capital gains tax rate will be five percent. The other income tax brackets will fall into the capital gains tax rate of fifteen percent. Keep in mind these rates can change with legislation. Rates can be extended or they can expire and revert to a previous rate which may be higher.