Capital gains tax New York is one of the important sources of revenue for the government of New York. Capital gains tax (CGT) is one of the most common types of taxes that are imposed in New York. A capital gain is an income or profit generated by selling a capital invesment, such as a farm, a house, a precious item, stocks, mutual funds, bonds, or a family business.
The word capital gain refers to the margin between the money which has been received by selling the capital investment and the money spent for acquiring it. The capital gains tax New York is paid both by corporations and individuals.
For the purpose of convenience of calculating the capital gains tax, the capital gains are categorized into two types:
Long term capital gains: Income or profit from sales of assets, which have been held for more than one year.
Short term capital gains: Profit or income from sales of assets, which have been held for less than one year.
At present, the capital gains tax (long term) is imposed in New York at different rates, for example, 5%, 15%, 25%, 28%, or other combined rates.
The amount of capital gains tax to be imposed is variable and it depends on a number of factors. If a person has received a short term capital gain, the CGT will be imposed on the normal or usual income tax rate. Nevertheless, if a person has received a long term capital gain, the CGT will be imposed at 15%. If any person falls within a tax bracket of 14% or lower than that, the CGT will be imposed on him or her at 5%. This amendment took place in the year 2003. In New York, the rules and regulations regarding the capital gains tax are delineated by the IRS or Internal Revenue Services.
The maximum rate of CGT imposed on short term capital gains can go up to 35% and this is similar to the tax calculation on salary income. In New York, the long term capital gains are taxed at a lower rate in comparison to the short term capital gains.
The tax planning strategies that are permitted by the IRS for deferring capital gains tax in New York include the following: