Capital gain

A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price. The largest capital market in the world is in the United States.

Capital gains may refer to "investment income" that arises in relation to real assets, such as property, financial assets, such as shares or bonds, and intangible assets such as goodwill.

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

See Also

• capital gains tax