Former President Bush’s tax packages included a decrease in the top rates for long-term capital gains from sales of assets such as individual stocks, bonds and shares of mutual funds owned more than 12 months. The rates dropped from 20 percent to 15 percent for individuals in the four highest income tax brackets and from 10 percent to zero percent — down from 5 percent before 2008 — for those in the two lowest brackets.  

But the reductions did not apply to all assets. Some gains continue to be taxed at higher rates. The maximum rate for long-term gains from sales of art works, gems, antiques, stamps, coins and other so-called collectibles stayed at 28 percent — nearly double the top rate for securities.

There was no change in the maximum rate of 25 percent for long-term gains from sales of real estate attributable to depreciation. The 25 percent rate affects individuals who invest directly in commercial properties, including apartment buildings and motels, and indirectly through REITS that own baskets of real estate holding anything from apartments to office complexes, from hospitals to shopping centers. After recaptured depreciation is taxed at the 25 percent rate, the 15 percent rate applies. 

Short-term gains from assets owned less than 12 months are taxed at ordinary income rates, currently as high as 35 percent. Someone in the 35 percent bracket (2009 taxable income above $372,950) who realizes a profit of $10,000 from selling shares, owes $3,500 for a short-term profit that would shrink to $1,500 for a long-term profit.

The long-term capital gains rates of 15 percent and zero percent are scheduled to end at the close of 2010. Starting in 2011, they will revert to the Clinton-era rates of 20 percent and 10 percent. 

One of Barack Obama’s campaign proposals was an increase from 15 percent to 20 percent for the top rate for long-term gains for individuals in the two top income tax brackets — adjusted to affect only individuals with incomes over $200,000 and families with incomes above $250,000. (It is unclear whether $200,000/$250,000 refers to wages, gross income, adjusted gross income or taxable income.) 

But investors in the 10 percent and 15 percent income tax brackets would still be taxed at a rate of zero percent on long-term gains. While on the hustings, he said nothing about revising the top rate of 28 percent for long-term gains from sales of collectibles. 

Unlike his rival Sen. John McCain, who called for substantially increasing the dollar limits on deductions for capital losses, Mr. Obama was silent on changing the loss limits which have not been revised upward since they went on the books in 1978, when Jimmy Carter was in the White House. Current law allows investors to offset losses against capital gains and as much as $3,000 of ordinary income from sources like salaries and pensions. (The ceiling drops to $1,500 for married couples filing separate returns.) Unused losses over $3,000 may be carried forward. So amid the thorns, there is an occasional rose: Losses — including those from 2008 and earlier — will become more valuable if the top rates for long-term gains and ordinary income go up. For instance, assume the top income tax bracket goes from 35 percent to 39.6 percent. Then the tax saved by a $3,000 deduction rises from $1,050 to $1,188.