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Long-term capital gains still have favorable rates.

Profits from the sale or exchange of capital assets held for over a year are generally taxed at 0%, 15% or 20%.  To be long-term the assets must be held over a year.

The rates are based on set income thresholds adjusted annually for inflation. For 2020, the 0% rate applies to taxpayers with taxable income up to $40,000 on single returns, $53,600 for head-of-household filers and $80,000 for married couples filing a joint return.  So a couple excludes $80,000 of capital gains tax free.

The 20% rate starts at $441,451 for singles, $469,051for household heads and $496,601 for joint filers.

The 15% rate is for filers with taxable incomes between the 0% and 20% break points, so capital gains for a couple with $80,001 in gains.

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