Capital gain is income that arises from the sale of a capital asset. Gain from the sale of securities held for investment, such as shares acquired from stock compensation, is a type of capital gain. Capital gains may be short-term (held 12 months or less) or long-term (held more than 12 months). Short-term capital gains are taxed at the rates of ordinary income. For the tax rates on long-term capital gains, see a related FAQ.
You must file IRS Form 8949 and Schedule D with your IRS Form 1040 tax return for any tax year in which you sell stock, regardless of whether you have capital gains.