CAPITAL GAINS TAX LANDSCAPE: ASSET PROFITS TAXATION

Capital gains tax is a tax on the profits made from the sale of an asset.

There are two types of capital gains taxes: short-term and long-term.

Short-term capital gains taxes are applied to assets held for less than a year and are taxed at the same rate as ordinary income.

Long-term capital gains taxes are applied to assets held for more than a year and are taxed at a lower rate than short-term gains.

The calculation of capital gains taxes takes into account the cost basis of the asset, which includes the purchase price and any associated fees.

Capital gains taxes can be offset by capital losses, which occur when an asset is sold for less than its cost basis.

It is important to understand the capital gains tax landscape and how asset profits are taxed in order to make informed investment decisions.