For 2013, what is the long-term capital gains rate? As I understand it, the rate is either 15% or 20% and it depends on your income. In addition, is it true that if your income is under the 25% tax bracket, there is no capital gains tax?

ANSWER

The BIDaWIZ Team's Answer:

If your earnings are in the 15% ordinary income tax bracket or lower, then you aren't subject to any federal capital gains tax. However, if your income exceeds the 15% ordinary income tax bracket, but is $400,000 or less and you're single or $450,000 and you file jointly, then your federal capital gains tax rate is 15%. If your income is more than $400,000 and you're single or more than $450,000 and you file as married filing jointly, your federal capital gains tax rate is 20%. There's one additional caveat. If your net investment income is more than $250,000 and you file jointly or it's more than $125,000 and you file separately or its more than $200,000 and you're single, you're subject to the 3.8% investment income surtax. You can reference the IRS capital gains tax tables in Section 1 of the internal revenue code. Please note that in California you may still be subject to capital gains taxes even if you aren't at the federal level. Capital gains are taxed at the same rate as ordinary income regardless of the holding period of the asset. Unlike federal law, California treats capital gains as ordinary income and does not give favorable lower rates to capital gains. The amount of California tax is not dependent on the holding period because there is no distinction between long-term and short-term capital gains.