Taxation of Investments

Taxation of investments refers to how taxes are applied to the profits earned from various investment activities, such as stocks, bonds, or real estate. When you sell an investment for more than you paid, the profit—called a capital gain—is typically taxed. The tax rate can vary based on how long you held the investment: shorter-term holdings may face higher rates than long-term ones. Additionally, income from dividends or interest also incurs taxes. Understanding these rules helps investors plan better and navigate potential obligations to the tax authorities.