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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Capital Gains

Definition:

If you schlep to work each day, you have to pay income tax to the IRS. If you invest money, make money through investments, or inherit money, you have to pay capital gains taxes. The rate on capital gains taxes is lower than income taxes. In theory, that's because the IRS wants to reward you for investing rather than spending. Call us skeptical—it still looks like more taxes to us.