Sentences with phrase «at the ordinary income tax rate applicable»

Distributions of earnings from nonqualifying dividends, interest income, other types of ordinary income, and short - term capital gains (i.e., on shares held for less than one year) will be taxed at the ordinary income tax rate applicable to the taxpayer.

Not exact matches

Under this new rule, Fund VP will recognize $ 15 million of long - term capital gain in 2018, and $ 5 million of short - term capital gain, which will be taxed at the applicable ordinary income tax rate.

It treats as short - term capital gain taxed at ordinary income rates the amount of a taxpayer's net long - term capital gain with respect to an applicable partnership interest if the partnership interest has been held for less than three years.

In addition to capital gains distributions, fund distributions may include nonqualified ordinary dividends (taxed at ordinary income tax rates), qualified dividends (taxed at rates applicable to long - term capital gains if holding period and other requirements are met), exempt - interest dividends (not subject to regular federal income tax) and nondividend, or return of capital, distributions, which are not subject to current tax.

When the account holder begins taking withdrawals, which are mandated by age 70 1/2, taxes will be paid on distributions according to ordinary income tax rates applicable at that time.

This means that you will pay federal and state tax (if applicable in your state) at the rates that apply to other types of ordinary income such as wages from employment.