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the federal government taxes short-term (held less than 1 year) and long-term (held 1+ years) gains differently. ST gains are taxed like regular income; LT gains are taxed at a special rate (15%, I think).

To be excessively picky:

- The short-term holding period is a year or less; long-term is more than a year.

- The rate on long-term capital gains is 15% if your tax bracket is 25% or higher. If you're in the two lowest bracket, long-term capital gains are taxed at just 5%.

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