You likely hope the investments you hold will rise in value. Still, you have to be aware of how increases in the value of your investments can trigger a tax bill when you sell the investment. Capital gains are generally the profits you realize when you sell an investment that is a capital asset for more than you paid for it, whereas capital losses are generally the losses you realize when you sell an investment that is a capital asset for less than you paid for it.
When you have a capital gain, you may have to pay tax on the gain at capital gains tax rates. Which tax rate applies depends in part on how long you held the asset. Generally, if you hold a capital asset for more than a year, gains on that asset are eligible for long-term capital gains rates, while gains on investments you sold in a year or less are considered shortterm. Generally, the tax rate is higher on short-term capital gains.
READ THE FULL ARTICLE BY DAVID CHISHOLM IN THE SPRING 2024 EDITION OF GAMING & LEISURE MAGAZINE.