How Does Capital Gains Tax Work

Capital gains taxes are incurred when you sell, give away or transfer an investment that’s increased in value like stocks or real estate. If you kept the house for over a year before selling that property, you are taxed with a long-term capital gains rate, and short-term for less than a year. The rate differs based upon the type of investment and your income tax bracket. To explain how does capital gains tax work, watch the following video. See also the List of Tax Write Offs and History of Income Taxes.