realized gain

(redirected from Realized Capital Gains)

Realized Gain

The amount by which the sale price of an asset exceeds its purchase price. Unless the realized gain came from a tax-exempt or tax-deferred asset, it is taxable. However, the type of taxation to which it is subject varies according to how long the asset has been owned. A realized gain from an asset owned longer than one year is usually taxed at the capital gains rate, while an asset owned for a period shorter than a year is often subject to the higher income tax rate. It is also called the recognized gain. See also: Unrealized gain.

realized gain

The amount by which the net proceeds from the sale of an asset exceed its cost of acquisition. When gains are realized, they become income for tax purposes. Compare unrealized gain.

Realized gain.

When you sell an investment for more than you paid, you have a realized gain.

For example, if you buy a stock for $20 a share and sell it for $35 a share, you have a realized gain of $15 a share. In contrast, if the price of the stock increases, and you don't sell, your gain is unrealized, or a paper profit.

Realizing your gains means you lock in any increase in value, which could potentially disappear if you continued to hold the investment.

But it also means you may owe tax on that profit when you sell unless the investment is tax exempt or you hold it in a tax-deferred or tax-free account. In a tax-deferred account, you can postpone paying the tax until you begin withdrawing from the account.

However, if taxes are due and you have owned the investment for more than a year when you sell, you pay tax at the long-term capital gains rate, which, for most types of investments, is lower than the rate at which you pay federal income tax on ordinary income.

realized gain

A tax concept meaning the taxpayer has received a profit—a gain—on the sale of real property,but,for various policy reasons codified into the Internal Revenue Code,the IRS chooses not to recognize the gain and,as a result,requires no payment of taxes at that time.The reason could be because the taxpayer took advantage of a 1031 exchange, because the gain was from the sale of a home and was less than the current exclusions, or because the property was taken by eminent domain and the proceeds reinvested within the required time period.

References in periodicals archive ?
Stable profitability from life reinsurance operations and significant investment earnings bolstered by increased realized capital gains generated from their sizable investment portfolios have helped mitigate the recently weak and, at times, volatile performance of their nonlife risk portfolio.
4 billion, reflecting increases in property-liability premium earned, life and annuity premiums and contract charges, and higher realized capital gains.
The elimination of the tax loss carryforward will allow the Corporation to distribute all future net realized capital gains to Stockholders," he said.
34 (thirty-four cents) and an annual distribution from 1996 realized capital gains in the amount of $0.
To the extent that the aggregate amount distributed by the Fund based on a fixed percentage of its net asset value exceeds its current and accumulated earnings and profits, the amount of that excess would constitute a return of capital or net realized capital gains for tax purposes.
20 (twenty cents) and an annual distribution from 1996 realized capital gains in the amount of $0.
It is the intention of the Fund to use net realized capital gains when making quarterly distributions, however this distribution policy would result in a return of capital to shareholders if the amount of the distribution exceeds the Fund's net investment income and realized capital gains.
22 (twenty-two cents) and an annual distribution from 1996 realized capital gains in the amount of $0.
VANGUARD BOND INDEX FUND/SHORT-TERM -- a supplemental distribution from realized capital gains in the amount of $0.
VANGUARD/MORGAN GROWTH FUND -- a supplemental distribution from 1995 realized capital gains in the amount of $0.
If the Fund's total distributions for the year exceed its net investment income and net realized capital gains for the year, all or a portion of the undesignated distributions may constitute a non-taxable return of capital.
In the past, the Fund has been able to maintain its policy of paying a stable monthly distribution by supplementing any shortfall in net investment income with realized capital gains.