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| Definitions by InvestorWords.com |
| What is...? |
| Short-term Capital Gains Tax Capital gains reflect the amount by which an asset's selling price exceeds its initial purchase price. An investment that has been sold at a profit is called a realized capital gain. An unrealized capital gain is an investment that hasn't been sold yet but would produce a profit if were. A short-term capital gain is the profit realized on an investment that was held for less than a stated minimum period of time?often a year and a day. Short-term capital gains are taxed at a rate higher than the rate used for long-term capital gains, and are also usually taxed at a higher rate than ordinary income. |
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