What is Capital Gains Tax?

It's important to understand what capital gains tax is, how it's calculated, and what tax rates apply.

tax form for capital gains and losses
(Image credit: Getty Images)

Capital gains tax applies to many investment transactions, so it's an important piece of the overall tax picture for millions of people.

What follows is a review of how to determine whether you had a capital gain, when it is taxed, how it is calculated, and what tax rates apply. This article also identifies IRS reporting requirements for capital gains and provides tips for taking advantage of preferential capital gains tax rates. 

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Principal, Tax, KPMG