what are the tax rate differences between short-term gains and long-term gains in stock transactions?

Answer 1

The answer depends on your tax bracket. Most simply put, you will pay your regular rate on short term capital gains (if you sell a stock within a year of buying), so if you are in the 15% bracket you will pay 15% of your gain in tax. If you hold longer than a year your rate will be reduced to 10% for your gains. If you are in a higher bracket, again the short term rate will equal your regular tax rate but long term will be 20%.

Answer 2

To put it very simply (and somewhat technically incorrectly), short-term capital gains are taxed at the same rate as ordinary income (so it depends on which tax bracket you're in), while long-term gains are taxed at a fixed 20% rate.

Answer 3

Actually I believe that the long term cap gains rate for the lower two tax brackets is 5%.

Answer 4

Short term gains are at your ordinary tax rate, which is quite high for wealthy individuals (just under 40%). For long term gains, the rate used to be 20%. Bush's tax cuts for the Wealthy lowered the rate for dividends and long term tax gains to 15%,