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 Maine, capital gains tax is levied on the profit made from the sale of certain assets such as real estate, stocks, and other valuable items. The tax rate for capital gains can differ from regular income tax rates and is influenced by both federal and state tax laws. Federally, capital gains are classified as either short-term or long-term based on whether the asset was held for more or less than a year, with long-term gains generally taxed at a lower rate. Maine conforms to the federal treatment of capital gains for the most part, but it also applies its own state-level taxes. The state taxes capital gains as part of the individual income tax, with rates that vary depending on the taxpayer's income bracket. It's important for taxpayers in Maine to consult with an attorney or tax specialist to understand the specific implications of state and federal capital gains tax regulations on their individual situations.