How are capital gains taxed in non-retirement accounts?

Gains taxed based on holding period: short-term taxed as income, long-term at reduced rates.

Capital gains in non-retirement accounts are taxed based on how long the asset was held. Short-term capital gains, from assets held for less than a year, are taxed as ordinary income at your regular tax rate. Long-term capital gains, from assets held for more than a year, are taxed at preferential rates of 0%, 15%, or 20%, depending on your total income. This distinction can significantly affect your tax liability, so it’s important to track holding periods. For details, visit the IRS Capital Gains page.