Quote:
Originally Posted by Larryp
Capital gains tax is discounted the longer you own the asset, and property is normally held for a long time
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No it isn't.
What happens is that when you sell the asset owned for longer than a year, you calculate the capital gain (if any), divide it by two, and add it to your taxable income, and calculate the tax.
Of course this means that if you have made a big capital gain, it matters not that you may not be at the lowest tax rate, as you will be pushed into higher tax rates or into the top one. So for really big gains, a fair chunk of capital gains will be at the highest marginal tax rate divided by two.
For assets purchased after 1999, you can hold them as long as you want, but the same calculation applies.
Regards,
Renato