What is short-term capital gains tax?

As a beginner in the investing world you might wonder what a lots of investing terms and other terms linked with investing may mean. I know this struggle because I’ve been there too when I first started investing which at this point have been a very long time ago.

Short-term capital gains tax is one of these complicated terms which you might know or not know about. And thats why we are talking about it today.

So basically short-term capital gains tax is a tax which runs on profits from the sale of a which you may hold. This asset might be everything from real estate, stocks, crypto, car etc. However you must hold that asset for less than a year for it to be a short-term capital gains tax.

When it comes to the rates which short-term capital gains tax then we are talking about the rate that is equal to your ordinary income tax rate which of course is your tax bracket.

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