Donna Genie breaks down Biden's proposal to raise the long-term capital gains tax from 20% to 39.6%. On a $100,000 gain, federal tax would jump from $20,000 to $39,600. Capital gains are profits from selling investments like stocks or rental homes.
President Biden has released his 2025 fiscal year projections and his budget ideas, and one of his proposals is to change the capital gains rate from 20% to 39.6%. Yes. Nearly doubling how much tax you would pay on a capital gain. What is a capital gain? A capital gain is profit that you make when you're selling an investment. That could be anything from stocks to homes, like rental homes or properties, land, anything like that. That is going to be a capital gain. So if you sold a and made a profit of $100,000 selling a piece of land, for example, the federal income tax on that would be 20% as long as you've held it for a year or longer. Under these new proposed regulations, your tax bill would go from $20,000 to $39,600. That's a whopper of an increase.
