Capital gains taxes are levied on gains from the sale of assets, such as stocks, bonds and real estate. The tax rate depends on a number of factors, such as the type of asset sold and the length of time held. For example, long-term capital gains are generally taxed at a lower rate than short-term gains. In addition, special rules may apply to certain types of assets, such as collectibles and small business stock.

Tax-exempt capital gains:

Capital gains from real estate transactions are taxable in the U.S. As an exception, a capital gain of maximum $250,000 (for singles) and $500,000 (for married couples) applies when selling a property that for a minimum of two years served as their principal residence.

For foreigners, a stay of 730 days within a five-year period is sufficient to meet this two-year period. Only the time actually spent in the U.S. is considered. Under the right conditions, a substantial tax-free capital gain can be realized in the U.S.

Taxable capital gain:

In all other transactions, the capital gain is taxable. The determination of the gain is made under usual aspects: the purchase price and the investments made are deducted from the sale price.

For personally owned real estate (personally owned, through a Limited Liability Company or LLP partnership) the maximum personal tax rate applies for a holding period of less than 12 months. The rate for capital gains with a holding time of 1 year and 1 day or more is currently between 0 and 15%. The exact determination of the tax rate is made according to the taxpayer’s tax progression scale.

Capital gains taxes can be complex, so it is important to consult with a tax professional to make sure you are in compliance with the law.