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 New York, capital gains are taxed as regular income on both the state and federal levels. This means that any profit from the sale of an asset like real estate, stocks, or collectibles is subject to capital gains tax. The rate at which these gains are taxed depends on how long the asset was held. Short-term capital gains, for assets held for one year or less, are taxed at the same rates as ordinary income. Long-term capital gains, for assets held for more than one year, are taxed at reduced rates, which are typically lower than the rates for ordinary income. The federal tax rates for long-term capital gains can vary based on the taxpayer's income bracket, while New York State taxes capital gains as income, so they are subject to the state's income tax rates. It's important to note that there are certain exclusions and exemptions, such as the exclusion of gain on the sale of a primary residence up to a certain amount. Taxpayers should consult with an attorney or tax specialist to understand the specific implications for their individual situation.