Short-Term Capital Gains
Profit on assets held one year or less, taxed at your higher ordinary income rates.
Short-term capital gains come from selling an asset you held for one year or less. They're taxed as ordinary income — the same rates as your wages — which is typically higher than the preferential long-term rate. This is a core reason buy-and-hold investing is more tax-efficient than frequent trading.
The one-year holding period is a bright line: selling even a day past a year can shift a gain from short-term to long-term treatment and meaningfully lower the tax. It's worth knowing your holding dates before you sell.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.