TRA '97 and capital gains
Article Abstract:
The Taxpayers Relief Act (TRA) of 1997 imposes different tax rates for transactions involving capital gains. The long-term holding period for sales and exchanges of capital assets made after July 28, 1997 is extended to 18 months from 12 months while the maximum tax rate on these capital assets is cut to 20% for taxpayers belonging in the 28%-or-higher bracket and 10% for taxpayers in the 15% tax bracket. The TRA creates a new middle class of capital gains for sales or exchanges made after July 28, 1997. The holding period for these middle class capital assets is 12 to 18 months, and its maximum net tax rate is 28%. In addition to these retroactive rates, a prospective rate is offered for capital assets purchased after the Year 2000. Assets acquired after this year and held for over five years is given a tax rate of 18% for those in the 28% bracket and 8% for those in the 15% bracket.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1997
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United States Savings Bonds
Article Abstract:
The United States Savings Bond is a well-liked investment for individuals from different income levels. An attractive tax attribute of savings bonds is that they defer the recognition of accrued interest until the encashment, disposition or final maturity of the bond, whichever comes first. For income tax purposes, bondholders can choose to incorporate the accrued interest in gross income annually although the election is irrevocable without the consent of the Commissioner and is applicable to all Series E and EE bonds owned by the bondholder. Unlike corporate or municipal bonds, these savings bonds are dated with a month and year only. Series EE bonds, which were introduced in July 1980, are issued for 50% of face value. The bonds must be redeemed or rolled over to a Series HH bond at the final maturity date.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1996
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