What is the long-term capital gains tax rate?

• A. 10%
• B. 15%
• C. 25%
• D. 35%

Answer: (B)

Long-term gains tax rates apply to profits from assets held more than a year, and they’re designed to be lower than ordinary income tax rates to encourage long-term investing. For most taxpayers, the rate on these gains is fifteen percent. It can be lower (zero percent) for very low incomes or higher (around twenty percent) for higher incomes, depending on the year’s brackets. The other percentages listed aren’t the general long-term gains rate: ten percent is an ordinary-income rate in many brackets, twenty-five percent isn’t the standard long-term rate, and thirty-five percent is the top ordinary-income rate not used for the typical long-term capital gains.