A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.
Capital gains may refer to "investment income" that arises in relation to real assets, such as property; financial assets, such as shares/stocks 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.
Famous quotes containing the words capital and/or gain:
“It is a capital blunder; as you discover, when another man recites his charities.”
—Ralph Waldo Emerson (1803–1882)
“Well: what we gain by science is, after all, sadness, as the Preacher saith. The more we know of the laws & nature of the Universe the more ghastly a business we perceive it all to be—& the non-necessity of it.”
—Thomas Hardy (1840–1928)