Capital gains tax is a tax on the profit you earn when you sell an asset for more than you paid for it. The IRS distinguishes between short-term and long-term capital gains based on how long you held the asset before selling.

Short-term capital gains apply to assets held for less than one year and are taxed at your ordinary income tax rate, which can be as high as 37%. Long-term capital gains apply to assets held for one year or more and benefit from lower preferential tax rates of 0%, 15%, or 20% depending on your taxable income and filing status.

• done_all Short-Term: Gains on assets held less than 1 year are taxed as ordinary income at your marginal rate.
• done_all Long-Term: Gains on assets held 1 year or more enjoy preferential rates of 0%, 15%, or 20%.
• done_all Net Investment Income Tax: High earners may owe an additional 3.8% NIIT on investment gains.
• done_all Tax-Loss Harvesting: Capital losses can offset gains and reduce your tax liability by up to $3,000 per year.