Capital gain

From Wikipedia, the free encyclopedia

A capital gain is a profit that results from the sale or exchange of a capital asset; such as "stocks", "bonds", or "real estate" which exceeds the purchase price. On the other hand a capital loss arises if the sale proceeds of a capital asset are less than the purchase price.

Capital gains arise in relation to real assets, such as property, financial assets, such as shares or bonds, and intangible assets such as Goodwill.

Many jurisdictions impose a capital gains tax on capital gains of an individual or corporation, although relief may be available to exempt capital gains in relation to holdings in certain assets such as significant common stock holdings, provide incentives for entrepreneurship, or compensate for the effects of inflation.