Tax
What is Capital Gains?
Profit from selling an asset for more than your cost basis - taxed at preferential rates if held more than 1 year (long-term).
Capital gains are the profit on selling an asset above its cost basis. For stock: gain = sale price - tax basis. Short-term (held 1 year or less): taxed at ordinary income rates (up to 37% federal). Long-term (held more than 1 year): 0/15/20% federal plus 3.8% NIIT for high earners. State tax adds on top - California taxes capital gains as ordinary income with no LTCG preference. The 1-year holding distinction is one of the most important dates in equity life.