Short-Term Capital Gains
Profit from selling an asset held for a short period, often taxed at higher rates.
Short-term capital gains arise when an asset — such as shares, crypto, or property — is sold after being held for only a short period, commonly one year or less. Many tax systems treat these gains as ordinary income and apply the taxpayer's full marginal income tax rate, making them more expensive than long-term gains. The exact holding period and rate vary by country, and some jurisdictions make no distinction between short- and long-term gains at all.
Examples
- In the United States, assets held one year or less are taxed at ordinary income rates of up to 37%.
- Germany taxes gains on shares held under a year at the flat capital gains rate.