Question

The top marginal tax rate for 2009 is 35%. For most capital assets sold during 2009, what is the maximum tax rate for long-term capital gains?

1) 25%
2) 30%
3) 35%
4) 40%

Answer 1

The maximum tax rate for long-term capital gains is 25%. Option 1.

Step-by-step explanation:

The maximum tax rate for long-term capital gains is 15%. This rate is lower than the top marginal tax rate for ordinary income, which is 35%. Long-term capital gains are taxed at different rates because they are considered investments and incentivize long-term investment.

For example, if an individual sells a stock that they have held for at least one year, they would pay a maximum tax rate of 15% on the capital gains from that sale.

Therefore, the correct answer to the question is 1) 25% which is not the maximum tax rate for long-term capital gains.