realized gain

(redirected from Realized Capital Gain)

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 ?
In cases where the investor does not have a realized capital gain but does have losses in a portfolio, the tax code allows a $3,000 deduction in capital losses to be deducted from ordinary income each year.
Each quarter, the Board of Trustees reviews the amount of any potential distribution and the income, realized capital gain, or capital available.
Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized capital gain, or capital available.
The net income recovery is substantially explained by the recovery in the net realized capital gain position from losses that were experienced in 2008.
This ruling concluded that: (1) F realized capital gain based on the difference between F's basis in the property and the annuity's PV; (2) this gain was reported ratably over F's life expectancy; (3) the investment in the contract to compute the exclusion ratio was F's basis in the property transferred; (4) the excess of the property's FMV over the annuity's PV was a gift from F to S; and (5) the prorated capital gain reported annually was derived from the taxable portion of each payment.
"In 2005 the most significant driver of statutory net realized capital gain for New York Life was the sale of an apartment house in Manhattan for a gain in the hundreds of millions of dollars," says William Werfelman, a spokesman for New York Life, New York.
The difference largely reflects the realized capital gain of the seller who receives unencumbered cash, only part of which is apparently added to a down payment on a subsequent home purchase.
S has $50,000 and a $40,000 realized capital gain ($50,000 redemption value -$10,000 basis).
The minor would be subject to tax on any realized capital gain on the sale, taxable at the minor's tax rate or under the kiddie tax rules.
Each quarter, the Board of Directors reviews the amount of any potential distribution from the income, realized capital gain, or capital available.
She claimed her adjusted cost basis in the property also was $3.6 million and therefore there was no realized capital gain on the sale.
received by the income beneficiary will not be considered tax-exempt until the current and prior ordinary income earned by the trust and the entire realized capital gain have been recognized by the donor for tax purposes.