Capital Gains
InvestingThe profit earned from selling an investment for more than its purchase price, subject to taxation.
Example
Example: You bought 100 shares of stock at $50/share ($5,000 total) and sold them 2 years later at $80/share ($8,000). Your capital gain is $3,000. Since you held longer than 1 year, it is a long-term gain taxed at 15% ($450) instead of your ordinary rate of 22% ($660). Holding for just one extra day past the 1-year mark saved you $210. Use our capital gains calculator.