Navigate Through the Multitude of Rules for Capital Gains and Losses

Document Type



Published by Thomson Reuters in Practical Tax Strategies, volume 81 issue 5, 2008. Bryant users may access this article here.


Thomson Professional and Regulatory Services, Inc.

Publication Source

Practical Tax Strategies


For federal income tax purposes, the ordinary income of individuals is taxed at rates of 10%, 15%, 25%, 28%, 33%, and 35% in 2008. Adjusted net capital gain (ANCG), however, is taxed at much lower rates. ANCG includes certain long-term capital gain and qualified dividends. During 2008 through 2010, ANCG is taxed at 0% for taxpayers in the 10% and 15% ordinary income tax brackets. One might think that the subject of ANCG has limited application: the retired and semi-retired. Beginning in 2011, the tax rate on ANCG is scheduled to jump up. For instance, qualified dividends will be taxed as ordinary income with rates ranging from 10% to 35%. Sometime in the future, when people are talking to their grandchildren, they might say, they remember the days when gas cost $.50 per gallon, bread cost $.22 cents per loaf, and there was a 0% tax bracket (although all three did not occur at the same time).