What type of gain results from selling shares owned for more than one year?

A long-term gain results from selling shares that have been owned for more than one year. In the context of taxation, the distinction between short-term and long-term capital gains is crucial. Short-term gains apply to assets sold after being held for one year or less and are taxed at ordinary income tax rates, which can be significantly higher.

On the other hand, long-term gains benefit from a lower tax rate, reflecting tax policy's incentive to encourage long-term investment. This reduced rate is typically advantageous for individuals who hold investments over an extended period, leading to a more favorable tax outcome when they realize profits from the sale of those investments.

Understanding this classification helps taxpayers plan their investments and anticipate the tax implications of selling assets, optimizing their financial decisions regarding the holding period of their investments.