What Is Capital Gains? Meaning & Example
Definition
A capital gain is the profit from selling an asset for more than you paid. Many tax systems tax capital gains, often at different rates depending on how long you held the asset.
Related terms
Total return combines price change with income such as dividends or interest. It gives a complete picture of how an investment performed.
Tax-Advantaged AccountA tax-advantaged account offers tax benefits such as deductions, tax-deferred growth or tax-free withdrawals. Rules and limits vary by account type and country.
Brokerage AccountA brokerage account is an account with a licensed firm that lets you buy and sell investments such as stocks, bonds and funds. Taxable brokerage accounts have no special tax benefits.
What is Capital Gains?
A capital gain is the profit from selling an asset for more than you paid. Many tax systems tax capital gains, often at different rates depending on how long you held the asset.
Can you give an example of Capital Gains?
Buying shares for $1,000 and selling them for $1,400 creates a $400 capital gain.