Short-Term Capital Gains

Short-term capital gains refer to the profits earned from selling assets, such as stocks or real estate, that you have held for one year or less. In terms of tax laws, these gains are typically taxed at your ordinary income tax rates, which can be higher than the rates for long-term capital gains (held over a year). This means that if you sell an asset quickly for a profit, you'll pay more in taxes compared to holding onto it longer. Understanding this can help in making informed financial decisions regarding investments.