What is a capital gain?

Notebook with capital gains tax sign on a table. Business concept.It is a type of income that is realized when an asset is sold at a profit. As a simple example, if you buy a stock & then sell it for more than it cost you to purchase, you’ll have a capital gain.

The difference between your basis in the asset & your net sales revenue typically equals your capital gain, although “basis” calculations can be quite complex.

Capital Gains are taxed at different tax rates than regular income such as wages.

For tax purposes, long term capital gains & short term capital gains are also subject to different tax rates.

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