Tip of the Week: Capital Gains Shortened (11/30/98)

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	Capital Gains Shortened Financial Tip of the Week by Deloitte & Touche OnLine November 30, 1998

You might be eligible for a lower capital gains rate.

For sales after Dec. 31, 1997, the holding period for preferential treatment of capital gains has been reduced from more-than-18-months to more-than-12-months. Thus, individuals who realize capital gains on the sale of an asset during calendar year 1998 will be eligible for the 20 percent capital gains tax rate, if they have held the asset for more than one year. (The applicable rate is 10 percent for taxpayers in certain low tax brackets.)

This provides an immediate tax benefit for many taxpayers, and it eliminates thorny problems related to the more-than-18-month holding period that had been created by the 1997 legislation. The change should dramatically simplify the 1998 tax filing season by making Schedule D (which is used to report capital gains) much easier for taxpayers to complete.