Investors Beware--Capital Gains Tax to Increase
The capital gain reduction that went into effect in 2003 under the Tax Increase Prevention and Reconciliation Act will sunset on January 1, 2011. The tax rate for long-term capital gains will revert from the current 15% back to the former 20% tax rate. In 2013 an additional tax of 3.8% will also be imposed on certain investment income which will bring the new capital gain rate to 23.8% for certain taxpayers.