What Is the Capital Gains Tax?

The capital gains tax is a tax that can be levied when you realize a gain. A gain is realized when the assets that have appreciated in value are sold and you take possession of the liquidity. Capital gains are divided into two distinct categories for tax purposes. There are short-term capital gains, and long-term capital gains. A gain is a short-term capital gain when the asset in question is sold within one year of the original acquisition. Short-term capital gains are taxed at your regular income tax rate. With long-term capital gains, which are gains that are realized more than a year after the original purchase, the scenario is quite a bit different. The powers that be want to encourage long-term investing, so the rate on long-term capital gains is not equal to your regular income tax rate. The exact long-term capital gains rate that applies to you would be based on your income. For most people, the long-term capital gains rate is 15 percent at the present time. People in the very


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