What is the maximum tax rate that applies to certain long-term capital gains?

The maximum tax rate that applies to certain long-term capital gains is indeed 20%. Long-term capital gains generally arise from the sale of assets held for more than one year and are taxed at a lower rate than ordinary income. The 20% rate applies to individuals in the highest income brackets.

However, there is also an exception for specific types of assets like collectibles and certain types of real estate, which can be taxed at different rates, such as 25% or 28%. The 28% rate primarily concerns the sale of collectibles, while the 25% rate can apply to certain types of unrecaptured Section 1250 gains from real estate depreciation.

It’s essential to understand that while the maximum rate applicable to long-term capital gains generally is 20% for most assets, the exceptions—along with the specific types of income they pertain to—create nuances in the overall capital gains tax landscape. Therefore, for the general case of long-term capital gains, the maximum tax rate is recognized as 20%.