Capital Gain Tax Rates

Capital gains tax is a tax on the profit made from selling an asset, like stocks or real estate. The rate you pay depends on how long you held the asset: if you owned it for over a year, it’s usually taxed at a lower "long-term" rate, which can be 0%, 15%, or 20%, depending on your income. If you held it for a year or less, it's taxed as ordinary income, which can be higher. Essentially, longer ownership often results in a lower tax burden on your profits.