By Kortney Christensen, CFP®, Executive Vice President, Director of Sales and Marketing

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While there are no changes to individual long-term capital gains rates which remain at 0%, 15% and 20%, there is a shift in how you determine your rate.  In prior years, it was based upon your marginal tax bracket.  Starting in 2018, it is based on your adjusted gross income.  Most taxpayers will find that they are paying a similar rate to what they have in the past if their income has remained level.  The 3.8% net investment income tax is still maintained and will continue to impact high income individuals, increasing the top capital gains bracket of 20% to 23.8%.

Note that you are still allowed to exempt the gain from the sale of a qualified principal residence, up to $250,000 for individuals and $500,000 for married filing joint couples.

Benjamin F. Edwards & Co. does not provide tax advice, therefore it is also important to consult with your tax professional for additional guidance tailored to your specific situation.