Under the Taxpayer Relief Act of 1997, new maximum capital gain rates became effective Jan. 1, 2001. Specifically, under Sec. 1(h)(2)(B) and 1(h)(9), the 20% capital gain rate has been lowered to 18%, provided property is held for more than five years and a taxpayer's holding period begins after 2000. Similarly, the 10% capital gain rate under Sec. 1(h)(2)(A) has been lowered to 8%, provided the property is held for more than five years; the 8% reduced rate will apply regardless of when the holding period began. The provision applies to all gains other than "collectibles gain" as defined in Sec. 1(h)(6), unrecaptured Sec. 1250 gains and Sec. 1202 gains.
Simply stated, this change …
