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 ?
Assets that have long-term capital gain potential but are currently in a loss position should be sold in 2000 to recognize the loss, if the loss can be used against recognized gains, and then repurchased in 2001.
Taxpayers expecting a 20% capital gains rate on the sale of realty may be unaware of the applicable 25% rate and the fact that 100% of their recognized gains will be taxed at the 25% rate until all the depreciation taken has been recaptured.
Recognized gains from involuntary conversions or the sale of a principal residence are excluded.
4 million in net cash proceeds and recognized gains of $3.
5 million, generating $800,000 in net cash proceeds and recognized gains of $1.
For the nine months ended September 20, 2004, the company recognized gains on the sale of securities of $90,802 compared to a loss of $2,794 for the same period in 2005.
Net proceeds from these dispositions totaled $24 million and the Company recognized gains on these dispositions, net of losses or impairments of approximately $2.
CONSOLIDATED STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES FOR THE YEAR ENDED MARCH 31 1997
Previously, Allied Capital II had recognized gains of approximately $3.
9 million in cash proceeds and a recognized gain of $4.

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