“Understanding Long-Term vs. Short-Term Capital Gains”
February 10, 2021
“When you sell a capital asset for more than you paid for it, the result is a capital gain. Capital assets include stocks, bonds, precious metals, jewelry, and real estate.1 The tax you’ll pay on the capital gain depends on how long you held the asset before selling it. Capital gains are classified as either long-term or short-term and are taxed accordingly.2
A short-term capital gain results from the sale of an asset owned for one year or less. While long-term capital gains are generally taxed at a more favorable rate than salary or wages, gains that are classified as short-term do not benefit from any special tax rates. They are subject to taxation as ordinary income.2…”