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[[For the 1998 tax year, one will pay 20% on any holding sold during the 1998 calendar year which
was bought 12 months and a day prior to the sale date.]]

Randy...

The percentage gain rate that you'll pay on long term capital gains (assets held for more than one year and sold on or after 1-1-98) will depend upon your normal, marginal tax rate. If your normal rate is 28% or greater, your maximum tax on your long term capital gains would be 20%.

But if your marginal tax bracket is 15%, then your tax rate for long term capital gains would be 10%.

So it would certainly be safe to say that, for federal purposes, the maximum tax that you would pay on your qualified long term capital gains would be 20%.

[[ Also, how does a wash sale affect capital gains (vs. capital losses)?]]

The wash sale rules only apply to stocks sold for a loss (as Bob pointed out). If the stock is sold for a gain, then you'll be obligated to pay taxes on that gain, regardless if your turn around and repurchase that stock (or even another stock) immediately before or after the "gain" sale.

We discuss both of these items in various posts in the Taxes FAQ area (archives section). You might want to drift over there and read more. In addition, both of these items are discussed in great detail in The Motley Fool Investment Tax Guide.

TMF Taxes
Roy

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