Capital gain
Also called: capital loss
A capital gain is the profit from selling an investment for more than you paid for it; selling for less is a capital loss.
A gain is realized when you sell. Until then it's unrealized, a paper gain. In the US, gains on assets held a year or less are short-term and taxed like income; longer holds get lower long-term rates.
Formula
Capital gain = sale price − cost basis
In Journey Shares
Gains are taxed on a weekly tax year: holds of a week or less at 22%, longer at 15%. →
Related terms
- Cost basis: Cost basis is what you paid for an investment, including fees, used to work out your gain or loss when you sell.
- Capital gains tax: Capital gains tax is tax on the profit from selling an investment for more than you paid.
- Wash sale rule: The wash sale rule stops you from claiming a tax loss if you buy the same or a substantially identical investment within 30 days before or after selling it at a loss.
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