03/17/2021
Capital gains tax is a growth on an investment. A capital gains tax can be on any asset class you own that appreciates in value and sold for profit. However there are exceptions for certain items.
But for now let's just look at capital gains through the perspective of a stock market investor.
In the stock market, capital gains tax is applied to realized games. The tax is on your profit.
Short term capital gains tax is tax that is applied to profits realize within one year from the time the security was purchased. Short-term capital gains tax is equivalent to your ordinary income tax rate.
Long-term capital gains tax is tax that is applied to a profits realize on securities sold a year or more after the date the security was purchased. Long-term capital gains tax has its own tax bracket, this means a lot less taxes for most investors.
