Question

Are there any special tax rates that apply for Long-term capital gains versus Short Term capital gains?  

Answer 1

Capital gain is the profit or the income that has been obtained by the sale of a capital asset. If the asset was held for less than an year and then sold, it is called short term capital gain. On the other hand, if the asset was held for more than an year then sold, it is called long term capital gain. The long term capital gains are subjected to favorable tax rates unlike short term capital gain. The short term capital gain is treated like ordinary income. The tax rates for long term capital gains is lower than short term capital gain.