Long-Term Capital Gains

Long-term capital gains are profits from selling assets, like stocks or real estate, that you’ve owned for over a year. These gains are taxed at a lower rate than short-term gains, which apply to assets held for a year or less. The idea is to encourage long-term investment. For example, if you buy a stock for $1,000 and sell it for $1,500 after two years, the $500 profit is a long-term capital gain. Tax rates may vary based on your income, but they are typically lower than regular income tax rates.