Question

Are all capital gains (gains on the sale or disposition of capital assets) taxed at the same rate? Explain.

Answer 1

No, all the taxable capital gains are not taxed at the same rate because there is a differentiation between capital gains in form of short term capital gain and long term capital gain.

Short term capital gains reflects through all such capital gains which are reflected that asset has been sold in less than a year.

Long term capital gains reflects through all such capital gains which are reflecting that assets are held for more than one year and then sold after one year.

Hence, short term capital gains will be taxed at normal rates, whereas long term capital gains are always Taxed at a lower rate in different part of the world.