capital gains tax and tax-efficient investing
Capital gains tax refers to the tax imposed on the profits earned from the sale of an investment or asset. It is applied specifically to the difference between the purchase price and the selling price of the investment, resulting in a tax liability on the capital gain. Tax-efficient investing, on the other hand, involves making strategic investment decisions to minimize the impact of taxes on investment returns. This approach focuses on maximizing after-tax returns by utilizing tax-advantaged accounts, tax-efficient investment strategies, and taking advantage of applicable tax deductions or exemptions. Overall, tax-efficient investing aims to optimize investment returns by lowering the tax burden.
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