Definition of long-term capital gains


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.

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Tax Basics β€Ί Kinds of Income

Although this topic is not without ​paid​controversy, the general idea is, if you are selling something you’ve owned for a long time, you can be taxed at 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.

​new​ In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA), which made many changes to tax rates for the 2018 tax year. Long-term capital gains taxes did not change significantly.