Quote:
Originally Posted by afc wimbledon
Personally I was thinking it should be treated as a capital gain or something of the sort, that usually gets taxed at fairly high rates.
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For the record, short term capital gains are taxed as ordinary income, so at one’s marginal tax bracket. Long term capital gains are taxed at either 0%, 15%, or 20%, depending on your income amounts and filing status.
In either case, though, you could also be subject to a 3.8% net investment income surtax and a 0.009 Medicare surtax, depending on your income and filing status, but, at the same time, the capital gains could be reduced or offset completely by capital losses in the current or past year.
Suffice it to say that with some tax planning, capital gains are not taxed at high rates at all.