Under the new tax law, how do capital gains work and what are the new rates?

Profits from the sale or exchange of capital assets held for more than a year are taxed at 0%, 15%, or 20%.

Under the new tax law, your capital gains tax rate is based on set income thresholds, which will be adjusted annually for inflation.  For 2018, the 0% rate applies to taxpayers with taxable income under $38,600 on single returns and $77,200 on joint returns.  The 20% rate starts at $425,800 for singles and $479,000 for jointly filed returns.  The 15% rate is for filers with taxable incomes between the 0% and 20% break points.

Remember, there is the 3.8% surtax on net investment income of singles with modified AGIs over $200,000 and couples over $250,000.  It’s due on the smaller of net investment income or the excess of modified AGI over these set amounts.

Kiplinger Tax Letter