German Capital Gains Tax: When It's Due and How Much You'll Pay
Capital gains tax is always due when you receive income from the sale of an asset that has increased in value.
This includes gains from the sale of stocks, bonds, real estate, and other investments.
The amount of capital gains tax you owe depends on your tax bracket and the holding period of the asset. The holding period is the amount of time you have owned the asset before selling it. Assets held for less than one year are considered short-term capital gains, while assets held for more than one year are considered long-term capital gains.
Short-term capital gains are taxed at your ordinary income tax rate. Long-term capital gains are taxed at a lower rate, which is currently 15% for most taxpayers.
There are a few exceptions to the general rule that capital gains tax is due when you receive income. These exceptions include:
- Gains from the sale of your personal residence are not taxable, up to a certain amount.
- Gains from the sale of certain retirement accounts, such as 401(k)s and IRAs, are not taxable.
- Gains from the sale of certain investments, such as municipal bonds, are not taxable.
If you have any questions about whether or not you owe capital gains tax, you should consult with a tax advisor.
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