A capital gain is income earned from the sale of a capital asset, such as stock or real estate, in excess of the original purchase price. Capital gains are distinct from “ordinary income”, which is income earned from other means, such as for services. There are also different tax rates for long-term capital gains (capital assets held for more than a year) and short-term capital gains (capital assets held for less than a year), and long-term capital gains are generally taxed at a lower rate than ordinary income or short-term capital gains.