capital gains tax

Capital Gains Tax:
It’s a tax imposed on the profits realized from selling certain assets, including stocks, bonds, and real estate.

  • Lower Tax Rate:
    Capital gains tax is typically lower than income tax, making it an attractive option for investors seeking to profit from their investments. This can incentivize long-term investment strategies.
  • Deferral of Tax:
    The tax on capital gains is often deferred until the asset is sold. This deferral allows investors to reinvest their profits without immediate taxation, promoting continuous growth of investment portfolios.
  • Varying Rates:
    The capital gains tax rate varies based on the type of asset sold and the duration it was held before being sold. Understanding these variations is crucial for effective tax planning and optimizing investment returns.

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