Income tax: Stock vs. Mutual fund?

I understand that I will be taxed on the capital gain that I received for my mutual fund, higher tax especially when I hold my mutual fund and sell it in less than a year. Now how about stock? I believe the income tax on stock will be different since it is impractical to hold a stock for a year and sell it in order to pay less tax... so how is the income tax rate on stocks (capital gain) comparing to mutual funds (capital gain)? (i.e. higher / lower tax rate)

Almost all capital gains are taxed at the same rates - either 5% or 15%. Collectibles have a rate of 28% and there are different rules for business assets which have been depreciated.

In short mutual funds and stocks suffer the same tax.

For tax purposes the two are pretty much the same. Hold them for less than a year and you have short term gain, taxed at the same tax rates as your other income. Hold them over one year and you have long term gain which is taxed at 15% or your regular rate if it is smaller.

The rates are the same, supposedly. But, on the mutual fund, you may be double-taxed, or taxed on gains that you didn't participate in. The mutual fund may declare a "capital gains distribution" that you have to pay tax on. Then, later, when you redeem your fund, you have to pay tax on the gains in the NAV.

Stocks and mutual funds work pretty much the same way. In both cases, you can have short term gains or long term gains. Short term is for investments held less than a year - gains are taxed at the same rate as your other income. Long term gains, for investments held over a year, are taxed at a lower rate.

If you own a mutual fund that has capital gains for you to report on your return while you still own it, you need to keep track of the amount of the distribution that you paid tax on, since when you do sell, that becomes part of your basis and you don't pay tax on that same amount again since you already did pay.

If you're a trader, buying and selling quickly, or if you buy stocks that you won't want to hold for a year, then you'll be stuck paying short term capital gains tax.