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 Oklahoma, as in other states, capital gains tax applies to the profit made from selling an asset for more than its purchase price. This includes gains from the sale of businesses, real estate, personal homes, stocks, bonds, collectibles, and jewelry. Capital gains are categorized as either short-term or long-term based on the holding period of the asset. Short-term capital gains, for assets held for one year or less, are taxed as ordinary income at the taxpayer's regular income tax rate. 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 specific rates can vary depending on the taxpayer's income level and filing status. It's important to note that the state of Oklahoma conforms to federal tax law for the purposes of capital gains taxation, meaning that the state's treatment of capital gains generally follows the federal guidelines set by the Internal Revenue Service (IRS). However, Oklahoma does offer some specific deductions and exemptions related to capital gains, so taxpayers should consult with an attorney or tax specialist to understand the full scope of their tax obligations and potential benefits under state law.