Replies to post #18316 on American Airlines Group Inc (AAL)

[j4turbo]

Short-term is your regular tax bracket.......so could be like 28-35% or higher if your ralph. Long term you can get 15% if your in the 28-35% bracket or 20% if your ralph.

So more like a 15% diff.

Long Term Capital Gains vs. Short Term Capital Gains

The rate of tax charged on a capital gain depends upon whether it was a long term capital gain (LTCG) or a short term capital gain (STCG). If the asset in question was held for one year or less, it’s a short term capital gain. If the asset was held for greater than one year, it’s a long term capital gain.

STCGs are taxed at normal income tax rates. In contrast, LTCGs, are taxed at the same rates as qualified dividend income. That is, any long term capital gains that fall in the highest (39.6%) tax bracket will be taxed at a rate of just 20%, any LTCGs that fall in the 25-35% tax brackets will be taxed at a rate of just 15%, and any LTCGs that fall in the 10% or 15% tax brackets will not be taxed at all.

An important takeaway here is that if you’re ever considering selling an investment that has increased in value, it might be a good idea to think about holding the asset long enough for the capital gain to be considered long term.

[CRichard]

Also if you're a pure trader and have no other form of income cap gains long term are taxed at 0%.