Capital Gains is applied when you sell an asset at a price higher than you paid to acquire it, the profit is referred to as “capital gains.” If you owned the asset for one year or less, the capital gains are considered “short term.” Capital gains on assets that are sold after you’ve owned them longer than one year are considered “long term.” Short-term gains and long-term gains are taxed at different rates.
Long Term Capital Gains - sell of assets held for more than one year:
A capital gains tax rate of 15% applies to the sale of most appreciated assets held over one year (28% for collectibles and 25% for depreciation recapture) for single filers with taxable income up to $415,050 ($466,950 for married couples filing jointly).
Short Term Capital Gains - sell of assets held for one year or less:
Appreciated assets held for less than a year receive no special treatment and are taxed at your ordinary income tax rate.
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