Capital Gains

The profit from selling an asset. Short-term gains (held <1 year) are taxed as ordinary income. Long-term gains (held >1 year) receive preferential rates of 0%, 15%, or 20% depending on income.

Key Points

Understanding capital gains is essential for evaluating real estate investments
This concept helps investors compare opportunities objectively
Our Free Snapshot tool automatically calculates relevant metrics for any property

Related Terms

1031 Exchange

A tax-deferred exchange that allows investors to sell a property and reinvest the proceeds in a like-kind property without paying immediate capital gains taxes. Strict timelines apply: 45 days to identify, 180 days to close.