Capital Gain Tax: An Overview of Its Nature and Purpose

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Taxing capital gains from foreign exchange trading can be very complex and confusing, ⁤but it is an important factor to consider when investing in the ⁢ forex market. In this article, we’ll provide an overview ‍of the‍ basics of capital gain‍ tax on forex transactions, and what​ you need to know ‌to remain compliant. rates schedule

Capital‌ gain tax rates are typically determined by marginal tax rates, which divides income into ⁤different brackets and applies a lower rate of tax to each bracket.

The following is‍ the 2021 long-term capital gains tax rates⁢ based on filing status:

-⁢ Single taxpayers: 0% on​ gains up to $40,400, 15% on ⁣gains of $40,401 ⁣- $445,850, and⁣ 20% on ⁢gains of $445,851+

– ⁢Married filing jointly: 0% on gains up to $80,800, 15%⁤ on ‍gains of $80,801 – $501,600,​ and 20% on gains ‍of $501,601+

– Head of household: 0% on gains up ⁣to $53,600, 15% on gains of $53,601 – $469,050, and​ 20% on gains of $469,051+

-‌ Married filing separately: 0% on gains up to $40,400, 15% on gains of $40,401 – $250,800, ⁢and 20% on gains of $250,801+

In addition, special capital gains tax rates ‍provide additional tax relief for certain ‌qualified​ investments. These include ⁤qualified small business stock (QSBS) and qualified real estate investment⁤ trust (REIT) stock.

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