What are the different forms of taxation for capital gains?
In Washington, capital gains are taxed differently than regular income. Capital gains are profits made when an asset, such as a stock or a house, is sold. The different forms of taxation for capital gains in Washington include: Long-Term Capital Gains Tax: This is a tax on any capital gain made after holding an asset for more than a year. This is taxed at a lower rate than regular income. Short-Term Capital Gains Tax: This is a tax on any capital gain made after holding an asset for one year or less. It is taxed at a higher rate than the long-term capital gains tax. Unearned Income Medicare Contributions Tax: This is a tax of 3.8% on any unearned income in excess of $200,000 for individuals and $250,000 for married couples filing jointly. Unearned income includes things like capital gains from investments and other forms of income that are not earned from labor. Alternative Minimum Tax: This is a tax that is applied to taxpayers with higher amounts of income from investments and other sources. It ensures that these taxpayers pay their fair share of tax. Washington also allows for exemptions on capital gains for some taxpayers. For instance, investors who qualify for long-term capital gains tax rates may be eligible for a reduced rate on certain capital gains. Additionally, certain amounts of capital gains can be excluded from taxable income. It is important to understand the different forms of taxation for capital gains and to ensure that you are in compliance with all applicable laws.
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