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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

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Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

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Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

  • Writer's pictureStephen Armstrong
    • Nov 10, 2022
    • 2 min read

LONG-TERM AND SHORT-TERM CAPITAL GAINS EXPLAINED


dollar bills

What happens when I sell a stock or bond that has increased in value?

Have you been eyeing a new vehicle, rental property, or any mid-to-large expense but haven’t pulled the trigger because you aren’t quite sure what the tax consequences will be? If your plan is to purchase an item with cash or check then you don’t have to worry about tax consequences; but if your plan is to purchase an item using money out of your brokerage account, then you might want to read this article.


What is a Capital Gain?

According to Investopedia, a capital gain refers to the increase in the value of a capital asset when it is sold. Put in layman’s terms, a capital gain is when you sell something for more than what you purchased it for. So, if you bought a used car for $5,000 in 2019 and then sold it for $8,000 in 2021, you would technically have a $3,000 capital gain. This is the same in the investment world. If you bought into a mutual fund, stock, bond, ETF, etc. for $10/share in 2019 and then sold it for $15/share in 2021, you would have $5/share in capital gains that you would be responsible to pay.


How are Capital Gains Taxed?

In the example we used above, you held the asset for more than one year, so you would be responsible to pay long-term capital gains on the sale of the asset. See the charts below for 2022 and 2023 long-term capital gains rates based on filing status and taxable income.





What if I sell an asset within a year of owning it?

Keeping with the same example we used above, what would happen if you bought the asset in 2019 and then sold the asset in 2019? Great question! Since you held the asset for less than one year, you would be responsible to pay short-term capital gains. Short-term capital gains are taxed as ordinary income. See the chart below for short-term capital gains rates based on filing status and taxable income for 2022.


Short-term Capital Gains Tax Rates for 2023

  • 35% for incomes over $231,250 ($462,500 for married couples filing jointly)

  • 32% for incomes over $182,100 ($364,200 for married couples filing jointly)

  • 24% for incomes over $95,375 ($190,750 for married couples filing jointly)

  • 22% for incomes over $44,725 ($89,450 for married couples filing jointly)

  • 12% for incomes over $11,000 ($22,000 for married couples filing jointly)

The lowest rate is 10% for the incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).


This article is not intended to be used as tax advice but rather more for educational purposes. If you have any specific questions about the taxation of capital gains or are looking for tax advice, please reach out to your local SmartVestor Pro or contact our CPA at Whitaker-Myers, Kage Rush.

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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

​

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

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