Question

The maximum tax rate of long-term gains on depreciable property used in a trade or business and held for more than one year is:

a.39.6%.
b.25%.
c.30%.
d.28%.
e.20%.

Answer 1

The maximum tax rate for long-term gains on depreciable property used in trade or business and held for over a year is 25%, known as the unrecaptured Section 1250 gain rate.

Step-by-step explanation:

The maximum tax rate on long-term gains on depreciable property used in a trade or business and held for more than one year is 25%.

This special rate, known as the unrecaptured Section 1250 gain rate, applies specifically to the portion of any gain related to depreciation previously claimed on real property. It's important to note that this is separate from the maximum tax rate on other long-term capital gains, which is 20% for higher-income earners under the current tax laws.