How Does Selling Investments Affect Taxes?

When you sell a stock, bond, or mutual fund for a profit, you owe capital gains taxes. If you held it more than a year, you pay long-term capital gains rates (0%, 15%, or 20%). If you held it for a year or less, you pay short-term rates (ordinary income rates). Your brokerage will send you a Form 1099-B summarizing your sales. You can offset gains with losses through tax-loss harvesting.