TheDirectory.com Inc (SEEK)

[RideTheTide]

The short-term capital gains tax rate is based upon your personal income tax rate (currently capped at 35%) and applies to stocks, bonds, mutual funds, real estate investment trusts, or other investments that have been held for less than one year. For instance, someone in the 35% tax bracket who made a $50,000 short-term capital gain would pay taxes of $17,500 ($50,000 x 35% = $17,500 short-term capital gains tax liability).

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Let's say you're usually taxed at 20% for income, once you sell stock, the ENTIRE amount is added to income and you may fall into a different tax bracket.