A capital gain is 'realised' only when you sell. Until then it's unrealised — a paper gain that fluctuates with the market and creates no tax bill.
Most countries tax long-term capital gains (assets held over a threshold, often one year) at a lower rate than short-term gains, which are usually taxed as ordinary income. Holding for the long term isn't just calmer — it's often tax-efficient too.
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Open Financial OS →Frequently asked questions
Do dividends count as capital gains?
No. Dividends are taxed separately, often as 'qualified' dividends at preferential rates in the US or under a specific dividend tax rate in other countries.
Can I offset gains with losses?
In many jurisdictions, yes — a practice known as tax-loss harvesting. Rules vary; consult a qualified tax professional for your situation.