Updated: Nov 18, 2019
What Is the Capital Gain Tax?
Capital gains are the profits realized from the sale of capital assets such as stocks, bonds, and property. The capital gains tax is triggered only when an asset is sold, not while the asset is held by an investor. However, when a mutual fund sells shares of its holdings during the year, mutual fund investors could be charged capital gains. (A fund’s capital gains distribution is not taxable if the fund is held in a tax-deferred account.)