Discover why holding investments for over a year can dramatically reduce your tax bill. Learn how short‑term and long‑term capital gains are taxed, and use our interactive tool to see the difference.
The moment you sell an investment for a profit, the taxman may take a slice. But how much you pay depends on one critical factor: how long you held the asset. Understanding the difference between short‑term and long‑term capital gains can save you thousands and help you make smarter investment decisions.
Taxed at your ordinary income tax rate – up to 37% (plus possible state taxes).
Taxed at preferential rates: 0%, 15%, or 20% depending on your taxable income.
The holding period starts the day after you buy and ends on the day you sell. Hold for at least one year and one day.
See how much you could save by holding an investment longer. Adjust the gain amount, your income, and filing status.
Adjust the values and click the button to see results.
This tool uses simplified 2024 tax brackets. Real results depend on your full tax situation, including deductions, credits, and state taxes.