capital gain (redirected from Capital gains)

Capital gain

When a stock is sold for a profit, the capital gain is the difference between the net sales price of the securities and their net cost, or original basis. If a stock is sold below cost, the difference is a capital loss.

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capital gain

The amount by which proceeds from the sale of a capital asset exceed the cost basis.

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Capital gain. When you sell an asset at a higher price than you paid for it, the difference is your capital gain. For example, if you buy 100 shares of stock for $20 a share and sell them for $30 a share, you realize a capital gain of $10 a share, or $1,000 in total.

If you own the stock for more than a year before selling it, you have a long-term capital gain. If you hold the stock for less than a year, you have a short-term capital gain.

Most long-term capital gains are taxed at a lower rate than your other income while short-term gains are taxed at your regular rate. There are some exceptions, such as gains on collectibles, which are taxed at 28%. The long-term capital gains tax rates are 15% for anyone whose marginal federal tax rate is 25% or higher, and 5% for anyone whose marginal rate is 10% or 15%.

You are exempt from paying capital gains tax on profits of up to $250,000 on the sale of your primary home if you're single and up to $500,000 if you're married and file a joint return, provided you meet the requirements for this exemption.

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capital gain

The taxable gain recognized from the sale of a capital asset. It is the difference between the sale price of the property and the adjusted basis.Tax laws routinely offer preferential treatment for long-term capital gains on property held for a certain period of time before sale. Capital gains may be offset by capital losses.

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Capital Gain

What Does Capital Gain Mean?

(1) An increase in the value of a capital asset (investment or real estate) above its purchase price. The gain is not realized until the asset is sold. A capital gain may be short term (one year or less) or long term (more than one year) and must be reported for tax purposes. A capital loss is incurred when there is a decrease in the capital asset value below the purchase price of an asset. (2) The profit that results when the price of a security held in a mutual fund rises above its purchase price and the security is sold (realized gain). If the security continues to be held, the gain is unrealized. A capital loss occurs when the opposite takes place.

Investopedia explains Capital Gain

(1) Long-term capital gains usually are taxed at a lower rate than is regular income or dividends. This is done to encourage entrepreneurship and investment in the economy. (2) Tax-conscious mutual fund investors should check a mutual fund's unrealized accumulated capital gains, which are expressed as a percentage of its net assets, before investing in a fund that may have a significant unrealized capital gain component. This circumstance is referred to as a fund's capital gains exposure. When a fund distributes capital gains, the mutual fund's owners are liable for the tax.

Related Terms:
• Bull Market
• Capital
• Capital Market Line—CML
• Return on Assets
• Stock

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Capital Gain

The gain from the sale or exchange of a capital asset.