[header] How to understand capital gains tax [title] Start at square one. [step] A capital gains tax is a tax on the profits from the sale of an asset. The asset could be virtually anything, such as a home, a piece of land, stocks, bonds, collectibles-even an intangible asset, like a trademark or a patent. 
[substeps] In this sense, capital just means money, and gains mean profit. Most people's income comes from wages, and that's mostly what ordinary income tax covers.