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πŸ‡ΊπŸ‡Έ US · US tax

Long-term capital gains

Also called: LTCG, long-term capital gains tax

In one line

The lower US tax rate applied to profit on assets held longer than a year before sale.

In plain English

Hold shares more than a year and your gain is taxed at the preferential long-term rate, well below ordinary income rates. It's the goal for most equity-holders planning a sale.

If you were explaining it to a 5-year-old

If you keep your toy more than a year before selling, the taxman takes a smaller bite of your profit.

Why it matters when you sell

Whether your gain is long- or short-term can change your tax bill substantially, so the one-year mark often shapes the best time to sell.

Related terms

Put it to use

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Sources

Primary references for this term: IRS (US tax). Our definitions are written in plain English and kept evergreen β€” see the glossary methodology. General information, not advice.

Educational information only β€” not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.