How does Vermont tax capital gains?

In Vermont, capital gains are taxed as part of the individual's income tax. The taxation of capital gains is dependent upon the taxpayer's income bracket, as Vermont utilizes a progressive income tax system. This means that as a taxpayer's income increases, the tax rate applied to their income also increases. Capital gains are classified as "long-term" or "short-term." Long-term capital gains, which are gains from the sale of assets held for more than one year, are taxed at the same rates as ordinary income. Short-term capital gains, gained from the sale of assets held for one year or less, are also taxed at the ordinary income tax rates. Taxpayers may report their capital gains on their Vermont income tax returns, and any deductions or exclusions applicable to the gains should be taken into account. For instance, homeowners may qualify to exclude some capital gains from the sale of their primary residence under both federal and state rules if certain criteria are met. Taxpayers seeking more detailed information about their specific situation and any potential deductions or exclusions may want to refer to the Vermont Department of Taxes’ regulations and guidelines available on their official website.