Long-term capital gain

A long-term capital gain is the profit you make when you sell an investment or another asset for more than you paid for it, after owning it for more than one year. If you owned it for one year or less, the same profit is a short-term gain instead.

For example, if you buy shares for $1,000 and sell them two years later for $1,300, the $300 difference is a long-term capital gain.

For 2026, long-term gains are taxed at federal rates of 0, 15 or 20 percent, depending on your taxable income; the thresholds change annually. Short-term gains are taxed as ordinary income, like wages. Gains on collectibles, including gold coins, face a maximum rate of 28 percent. These rules apply in a taxable account, not a retirement account; investments inside an IRA or a 401(k) are taxed differently.