Capital Gains Tax
Capital gains tax is a tax on capital gains incurred by individuals, companies or trusts upon the sale of certain types of assets, for more than their purchase price – includes shares, bonds, real estate plus other items.
There are two types of capital gains, long-term capital gains tax is a levy on the profits from the sale of assets held for more than a year. Short-term capital gains tax applies to assets held for less than a year and are taxed as ordinary income
Tax on capital gains occurs when an asset is sold. Assets that increase in value every year will not be taxed for capital gains until they are sold, no matter how long you happen to hold them.