David Bruner, The Tax Man: Capital gains rates

I am often asked what the capital gains rates are. They are:

For assets held more than 12 months (for 2009 tax year):

1. Taxpayers in the 10 percent or 15 percent tax bracket 0 percent;

2. Taxpayers in the remaining tax brackets 15 percent;

3. Section 1250 gain on real estate (recapturing gain) 25 percent;

4. Collectibles (stamps, works of art, coins, and etc.) 28 percent;

For assets held less than 12 months (for 2009 tax year): Taxed at your regular income tax rate.

These rates apply to individuals, estates and trusts. Corporations are taxed at different rates.

Capital gains are reported on Schedule D of your individual income tax returns

As it stands now through the end of 2010, the capital gains rates on taxpayers in the 10 percent or 15 percent income tax bracket is zero.

Your capital losses are deductible up to the amount of your capital gains. An additional loss of $3,000 is deductible to offset your other income. The remaining loss is then carried over until it is used.

As you can see, some tax planning with your CPA or tax preparer involving capital gains can result in significant tax savings to you.

David Bruner is a certified public accountant in Merced. You can reach him at (209) 384-3343.