What are Short Term Capital Gains?
Short term capital gains refer to the profits that investors make from selling assets, such as stocks, bonds, or real estate, within a short period, typically one year. Unlike long-term capital gains, which are taxed at a lower rate, short-term gains are taxed at the investor’s ordinary income tax rate. Understanding the nature of short-term capital gains is crucial for investors to make informed decisions about their investments and tax liabilities. This article will delve into the concept of short-term capital gains, their implications, and strategies to manage them effectively.
In the next section, we will explore the definition and characteristics of short-term capital gains.
