Capital gains are classified as long-term or short-term. Long-term capital gains are the profits an individual makes from selling assets, such as stock, a business, a house, or land, that were held for more than a year. Short-term capital gains are profits from the sale of assets held for less than a year.
Although this topic is not without controversy, the general idea is, if you are selling something you’ve owned for a long time, you can be taxed a lower rate.
All these rates have evolved over time based on economic and political factors, so you can be confident they will change again in the future.
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