# Long-Term vs Short-Term Capital Gains

*Taxes — Finicade finance glossary*

Gains on assets held longer than a year are long-term and taxed at preferential rates; anything shorter is short-term and taxed as ordinary income. In the US that gap can be more than twenty percentage points, so selling a week before the anniversary is one of the most expensive small mistakes available. The clock starts the day after purchase, and each lot of shares has its own holding period.

**Also known as:** long term capital gains, short term capital gains, holding period

**Related terms:** [Capital Gains Tax](https://finicade.com/glossary/capital-gains-tax), [Capital Gain](https://finicade.com/glossary/capital-gain), [Cost Basis](https://finicade.com/glossary/cost-basis), [Qualified Dividend](https://finicade.com/glossary/qualified-dividend), [Marginal Tax Rate](https://finicade.com/glossary/marginal-tax-rate)

Source: https://finicade.com/glossary/long-term-vs-short-term-capital-gains