Hold an investment 366 days vs 364 days and your tax bill can drop by 20 percentage points. That is the entire game.
Google this topic and you will get a hundred answers, half of them wrong. Here is the version that holds up. Hold an investment 366 days vs 364 days and your tax bill can drop by 20 percentage points. That is the entire game.
Held ≤ 1 year. Taxed at ordinary income rates (10–37% in US).
Held > 1 year. Taxed at 0%, 15% or 20% depending on income bracket.
Sell losers to offset winners; carry remaining losses to future years (up to $3,000/yr against ordinary income).
Do retirement accounts pay capital gains? No — 401(k)/IRA gains are tax-deferred or tax-free until withdrawal.
What about crypto? Same rules apply — short-term vs long-term holding period.
Run your own numbers before you trust a rule of thumb. Two minutes saves a lot of regret.