What Is a Short-Term Capital Gain?

A short-term capital gain is profit from selling an asset you owned for one year or less. These gains are taxed at your ordinary income rate — the same rate as your wages — which can be as high as 37%. That's why holding investments for more than a year to qualify for long-term capital gains rates often makes tax sense. Report short-term gains on Schedule D using Form 8949. The higher your income, the more you save by waiting.