Tax Name Dividend Income Tax Interest Income Tax Capital Gains Tax Investment Earnings Tax Rate If in bottom 2 tax brackets, not taxed. If in top 4 brackets, taxed at 15% Stock dividends Bond coupons Taxed as ordinary income: 10% to 35%. Exception: Municipal bond coupons are not taxed. Gain from sale of stocks or bonds Held for 1 year or less (short-term): taxed as ordinary income. Held for more than 1 year (long-term): taxed as dividend income. Aidan is paying his taxes and realizes that he was in the first tax bracket (10%) last year. Elevan years ago, he bought a common stock for $705. The same stock was sold last year for $947. During the same year, he earned $565 in dividends and $780 in coupons on a corporate bond. What will Aidan pay in taxes for last year's investment?