<Tr> <Td> <Ul> <Li> </Li> <Li> </Li> <Li> </Li> </Ul> </Td> </Tr> <Ul> <Li> </Li> <Li> </Li> <Li> </Li> </Ul> <P> In the United States of America, individuals and corporations pay U.S. federal income tax on the net total of all their capital gains . The tax rate depends on both the investor's tax bracket and the amount of time the investment was held . Short - term capital gains are taxed at the investor's ordinary income tax rate and are defined as investments held for a year or less before being sold . Long - term capital gains, on dispositions of assets held for more than one year, are taxed at a lower rate . </P> <P> As of 2017, the United States taxes short - term capital gains at the same rate as it taxes ordinary income (see exception). Some long - term capital gains are taxed at lower rates, shown in color in the table below: </P>

When do short term capital gains become long term