Definition: The profit you make when you sell an investment you’ve owned longer than a year for more than you paid for it. The income tax rate the U.S. government applies to this profit is less than the normal rate. Therefore, the government is giving investors an incentive to hold their investments at least one
Definition: Money that is owed by a person, business or government usually because goods have been acquired or services have been consumed without being paid for. The suppliers of these goods and services send bills for the amounts of the purchases. The bills represents a liability, money that is owed.