Capital Gain

Posted in Finance, Accounting and Economics Terms, Total Reads: 1140
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Definition: Capital Gain

Capital Gain is the gain which results when the price or the value of a capital asset or a security rises above the price at which it was bought for.

The capital asset can be a physical asset (such as a machine or a precious stone) or an intangible asset (like goodwill or copyright). Securities include mutual funds, bonds, options and stock.

The gain is realized only when the asset is sold and thus can be recorded in the books.

The opposite of capital gains is capital loss where the price of the asset goes down compared to the purchase price of the item or the security.


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