That’s an excellent question. Answer is it depends!
Profits from the sale or exchange of capital assets held for over a year generally taxed at 0%, 15% or 20%.
The rate depends on income limits that move (adjust for inflation).. In 2024, the 0% rate applies to taxable income up to $47,025 for singles, $63,000 for head-of-household and $94,050 on joint returns. The 20% rate begins at $518,901 for singles, $551,351 for household heads and $583,751 for joint filers. The 15% rate is for filers with taxable incomes between 0% and 20% break points.
Before 2018, long-term capital gains rates were tax bracket based. The 0% rate applied to the 10% or 15% income tax brackets, the 20% rate hit filers in the 39.6% bracket, and the 15% was for filers in other brackets.
The pre-2018 rules are scheduled to return after 2025, unless Congress acts.