realized 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 ?
367(b)-3(c)(3) to include the E&P amount (if any) rather than to recognize their realized gain on the section 367(b) exchange.
Using this approach, the husband was treated as having sold a $125,000 home with a basis of $75,000 for a realized gain of only $50,000.
shareholder, (5) then section 367(a) applies (requiring the recognition of realized gain on the exchange) unless the stock received by the transferor is stock in a CFC with respect to which the transferor is also a U.
76 (1) Excludes the following items: Amount Per share Net realized gain from investments $13,254,727 $ 1.
If the identified position is used to settle the contract, the benefit of the loss should be realized as an adjustment to the taxpayer's realized gain or loss on the deemed disposition of the identified position for its FMV.
The realized gain or loss is the difference between the amount realized and the taxpayer's adjusted basis in the property; no COD income is realized.
Home 1 was sold this year with a $560,000 realized gain.
A portion of realized gain on the sale of a principal residence may be exempt from capital-gain tax.
Realized gain on disposal of investments decreased to $862,959 as compared to $1,193,195 for the three months ended December 31, 2004;
1031, a taxpayer may exchange qualifying property without currently recognizing realized gain or loss.