Capital gains tax is a tax on income received from the sale of an asset—such as a business, real estate, your home, stocks, bonds, coin collections, and jewelry. Capital gains tax is paid on the financial gain between the amount you paid for (or invested to build) the asset, and the amount for which it is sold.

The rate (percentage) paid as capital gains tax has traditionally been lower than the rate (percentage) paid on income tax. And the Internal Revenue Service (IRS) has traditionally taxed long term gains differently than short term gains—with the distinction based on how long the taxpayer owned or held the asset.

In Kansas, as in all states, capital gains tax is primarily governed by federal law. Capital gains are the profits from the sale of an asset and are subject to taxation when the asset is sold for more than the purchase price. The Internal Revenue Service (IRS) differentiates between short-term capital gains, which are gains on assets held for one year or less, and long-term capital gains, on assets held for more than one year. Short-term capital gains are taxed at the same rates as ordinary income, which can be higher, while long-term capital gains benefit from lower tax rates. Kansas does not have a separate capital gains tax; instead, capital gains are taxed as part of the state income tax. The gain from the sale of an asset is included in the taxpayer's federal adjusted gross income, which is then subject to Kansas state income tax rates. It's important for taxpayers to consult with an attorney or tax advisor to understand the specific implications for their individual tax situation.