> For the complete documentation index, see [llms.txt](https://lofty-2.gitbook.io/faqs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lofty-2.gitbook.io/faqs/glossary/capital-gains-tax.md).

# Capital Gains Tax

Capital gain or loss is the difference in the value of a property compared to its purchase price. If there is a gain, it is realized after the asset is sold. A short-term capital gain is one year or less; a long-term gain is more than a year. Both must be claimed on your income taxes, but short-term capital gains have a higher tax rate than long-term capital gains.