Are all long-term capital gains subject to the lower tax rates?
The tax rate depends upon the date of the sale or exchange. • Sales or exchanges from January 1, 2003, through May 5, 2003, that resulted in qualified five-year gains may be eligible for the reduced 8% rate for taxpayers in the 10% and 15% tax brackets. • For sales or exchanges from May 6, 2003, through December 31, 2010, the qualified five-year gain rule is repealed, and long-term capital gains are taxed at the lower 15% and 5% rates. In 2008, 2009 and 2010, for taxpayers in the 10% and 15% tax brackets, long-term capital gains are taxed at 0%. • For sales or exchanges after December 31, 2010, the rates on long-term capital gains will return to the 20% and 10% levels. However, gains on sales or exchanges of assets held for more than five years will be eligible for the reduced tax rates of 18% or 8%, respectively, under the qualified five-year gain rules.
