Recommendations & StrategiesQuestion 52 of 110
Under current federal rules, long-term capital gains (on assets held more than one year) are generally taxed:
a.At the same rate as ordinary income
b.At a higher rate than ordinary income
c.At preferential rates lower than ordinary income rates
d.Not at all
Explanation
Long-term capital gains on assets held more than one year are taxed at preferential rates that are generally lower than ordinary income tax rates. Short-term gains, on assets held one year or less, are taxed as ordinary income. This favorable treatment rewards longer holding periods.
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