Capital Gain

A capital gain is the profit an investor realizes when they sell a capital asset for a price higher than its purchase price. This increase in value can apply to a wide range of assets, including stocks, bonds, real estate, collectibles, or even a business itself. The gain is calculated by subtracting the original purchase price (cost basis) and any associated selling costs from the final selling price. Capital gains are a significant component of investment returns and are typically subject to taxation, with different rates applying based on how long the asset was held.