The longer an investment is held before it is sold, the less the capital gains tax required. The government has changed the required time period over the years; presently, a gain on the sale of an investment held more than one year is treated as a long-term capital gain. If an asset is held one year or less and sold, the owner is taxed on the capital gain according to his or her tax bracket. The gain is treated as ordinary income and is referred to as a short-term capital gain. The taxes could be as high as 35 percent.