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Definition: Zero Capital Gains Rate
As the name suggests, zero capital gains rate is the provision to charge 0% capital gains tax rates to individuals who sell their property in some particular “enterprise zone”. Zero Capital Gain rates are usually implemented by government with a view to increase investments in a given area.
However this provision may come up with certain restrictions like an upper monetary cap, only limited to lower incomes, applicable on taxable income and not gross income, etc. Working Family Tax relief Act, 2004 which was passed by US Congress also extended 0% capital gain tax to certain properties being sold within the DC Enterprise Zone. Similar types of provisions are used by Legislators who want to create jobs and foster investments in a particular community enact zero capital gain tax rates.
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