realized gain

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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 ?
The Company reported earnings from operations, excluding net realized gains and losses on investments, of $26.
Unrealized holding gains and losses are not reported; realized gains and losses are reported in earnings.
Since funds with high turnover do a lot of selling, these funds generate a lot of realized gains each year, and these realized gains are distributed to fund holders.
The Fund's net realized gains for the year ended October 31, 2006 were $5.
If shareholders receive both stock and other property (the so-called boot) in such mergers, the realized gains are taxable--but in an amount not greater than the amount of boot received.
Therefore, various financial institutions and other employee benefit service providers that maintain records for plan administrators requested that the DOL not reject, and not issue deficiency notices for, 1988 Form 5500 annual reports solely because the plan administrator determined unrealized and realized gains and losses using the historical-cost approach.
The Fund is able to do this because of capital loss carryforwards which offset net realized gains.
Summary of Consolidated Operating Results (In thousands except per Three Months Ended Nine Months Ended share data) September 30, September 30, 2006 2005 2006 2005 Revenues: Revenues, excluding realized investment gains and derivative income (loss) $113,858 112,253 349,869 331,442 Derivative income (loss) 15,832 6,344 13,680 (10,056) Realized gains on investments 190 1,430 3,229 10,014 Total revenues $129,880 120,027 366,778 331,400 Earnings: Earnings from operations $15,948 19,240 50,245 53,960 Net realized gains on investments 124 929 2,099 6,509 Net earnings $16,072 20,169 52,344 60,469 Basic Earnings Per Share: Earnings from operations $4.
To be consistent with the current audit and accounting guide Audits of Investment Companies, the SOP does not require separate reporting of the portion of the realized gains and losses on investments and the change in market value of investments that result from changes in foreign currency rates.
Though the Fund had net realized gains as of the end of October, 2006, these gains would be offset by tax loss carry-forwards for book purposes but not for tax purposes.
Income before realized gains and losses on shares and real estate
Noteworthy, however, is the fact that Fairfax's bottom line and balance sheet absorb all of the reduction to equity and the commutation charge, while realized gains are shared with non-controlling interests.