Capital Gains on Investments

Capital gains refer to the profit you make when you sell an investment for more than you paid for it, such as stocks, real estate, or other assets. Under capital gains tax law, this profit may be subject to taxation. There are typically two types of capital gains: short-term (for assets held less than a year) taxed at ordinary income rates, and long-term (for assets held over a year) taxed at lower rates. Understanding capital gains is essential for managing your investments and tax obligations effectively.