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If you sell an asset for more than you paid for it, your profit (minus your cost basis) is called a capital gain.
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Dividends can be ordinary or qualified, and each are taxed at different rates.
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Short-term capital gains are profits from selling assets you own for a year or less. They’re usually taxed at ordinary income tax rates (10%, 12%, 22%, 24%, 32%, 35%, or 37%).
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Ordinary dividends are taxed at ordinary income tax rates. They’re usually reported in box 1 of the 1099-DIV you get from your bank or brokerage, or on a K-1.
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Long-term capital gains are profits from selling assets you own for more than a year. They’re usually taxed at lower long-term capital gains tax rates (0%, 15%, or 20%).
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Qualified dividends are taxed at lower capital gains tax rates. If you receive them, they should appear in box 1b of your 1099-DIV .
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Capital gains from stock sales are usually shown on the 1099-B you get from your bank or brokerage, or on a K-1 .
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