Differentiate long-term vs short-term capital gains rates.

Differentiate long-term vs short-term capital gains rates.

• A. Short-term gains are taxed as ordinary income; long-term gains have reduced rates if held longer than one year.
• B. Long-term gains taxed at ordinary rates; short-term gains are tax-free.
• C. Both taxed the same; no distinction.
• D. Short-term gains exempt if below threshold; long-term taxed at capital gains rate.

Answer: (A)