Understanding capital assets is crucial for anyone interested in personal finance, investing, or real estate. A capital asset is any significant property you own that can generate capital gains or losses when sold.
Examples of capital assets include:
• Real estate (homes, land, rental properties)
• Stocks and bonds
• Mutual funds
• Business interests
• Collectibles (art, coins, antiques)
• Personal property (jewelry, cars, etc.)
When selling one of these assets for a profit, it’s crucial to understand that you will pay capital gains taxes on the increase from the original purchase price. Capital gains taxes can also be affected by how long you have owned the asset.
- Short-term capital gains (held for less than a year) are taxed as ordinary income.
- Long-term capital gains (held for over a year) usually benefit from lower tax rates, ranging from 0% to 20%, depending on your taxable income.
Capital gains taxes will change according to your income for the year and the state that you live in. Taxes are paid on the profits made from the sale of your asset. When calculating your capital gains taxes, you must know your federal and state tax rates and if you will be subject to the Net Investment Income Tax (NIIT). Use the charts below to calculate your 2024 capital gains taxes.
Federal Capital Gains Tax Rates:
These amounts apply to long-term capital gains. Short-term capital gains will be taxed as ordinary income. Holding on to a capital asset for more than one year can significantly reduce the taxes owed.
| Tax Rate | Single | Married Filing Jointly | Married Filing separately | Head of Household |
| 0% | 0 to 47,025 | 0 to 94,050 | 0 to 47,025 | 0 to 63,000 |
| 15% | 47,026 to 518,900 | 94,051 to 583,750 | 47,026 to 291,850 | 63,001 to 551,350 |
| 20% | 518,901 and up | 583,751 and up | 291,851 and up | 551,351 and up |
State Capital Gains Taxes
Each state has its capital gains tax rate, and some states do not. The table below lists the capital gains taxes per state, from highest to lowest.
| California | 13.30% |
| New York | 10.90% |
| New Jersey | 10.75% |
| Washington D.C. | 10.75% |
| Oregon | 9.90% |
| Minnesota | 9.85% |
| Massachusetts | 9.00% |
| Vermont | 8.75% |
| Wisconsin | 7.65% |
| Hawaii | 7.15% |
| Maine | 7.15% |
| Washington | 7.00% |
| Connecticut | 6.99% |
| Delaware | 6.60% |
| South Carolina | 6.40% |
| Rhode Island | 5.99% |
| Montana | 5.90% |
| New Mexico | 5.90% |
| Nebraska | 5.84% |
| Idaho | 5.80% |
| Maryland | 5.75% |
| Virginia | 5.75% |
| Iowa | 5.70% |
| Kansas | 5.70% |
| Georgia | 5.49% |
| West Virginia | 5.12% |
| Alabama | 5.00% |
| Missouri | 4.80% |
| Oklahoma | 4.75% |
| Utah | 4.65% |
| North Carolina | 4.50% |
| Arkansas | 4.40% |
| Colorado | 4.40% |
| Louisiana | 4.25% |
| Michigan | 4.25% |
| Kentucky | 4.00% |
| Ohio | 3.50% |
| Pennsylvania | 3.70% |
| Indiana | 3.05% |
| Arizona | 2.50% |
| North Dakota | 2.50% |
| Alaska | 0.00% |
| Florida | 0.00% |
| Nevada | 0.00% |
| New Hampshire | 0.00% |
| South Dakota | 0.00% |
| Tennessee | 0.00% |
| Wyoming | 0.00% |
Net Investment Income Tax
High-income earners may also have to include a Net Investment Income Tax (NIIT) in their capital gains tax equation. This tax is added when your modified adjusted gross income exceeds the below thresholds.
| Married Filing Jointly | $250,000 |
| Married Filing Separately | $125,000 |
| Single | $200,000 |
| Head of Household | $200,000 |
| Widow(er) | $250,000 |
Understanding the implications of selling capital assets and managing capital gains taxes is essential for making sound financial decisions. If you are selling a capital asset, contact Wilson Hand for assistance navigating these complexities. Our team of tax advisors can provide personalized guidance and help you optimize your financial strategies. Don’t hesitate to contact us to discuss how we can assist you.