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How to Calculate Capital Gain Tax.
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How to Calculate Capital Gain Tax.

Rosemary Njeri

We can define Capital Gains Tax (CGT) as the tax that levied on transfer of property or simply as the cut the government gets when you realize a profit on your investments.

Capital gains tax reductions are often proposed as a policy that will increase saving and investment and boost long-term economic growth.

The U.S. capital gains tax only applies to profits from the sale of assets held for more than a year. Short-term sale of assets is taxed normally.

The capital tax rates vary from an entity to another depending on their tax bracket. The tax rates are 0%, 15%, and 20.

Formula to calculate capital gain tax.

Calculate Capital Gain Tax.

Example:

Suppose you sold your home after having it for 3 years and realized a profit of $ 1000, calculate your capital tax gains if your tax bracket is 15%.

Calculate Capital Gain Tax.

Therefore, the capital gain tax is $150.

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