Short-term capital gains tax is basically a tax on profits from the sale of an asset held for 1 year or less than that.
When it comes to the long-term capital gains tax then it is basically a tax on profits from the sale of an asset held for more than a year.
The short-term capital gains tax rate equals your normal income tax rate aka your tax bracket.
And the long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status.
The long-term capital gains tax are generally lower than short-term capital gains tax rates.
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