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:
“We saw the machinery where murderers are now executed. Seven have been executed. The plan is better than the old one. It is quietly done. Only a few, at the most about thirty or forty, can witness [an execution]. It excites nobody outside of the list permitted to attend. I think the time for capital punishment has passed. I would abolish it. But while it lasts this is the best mode.”
—Rutherford Birchard Hayes (1822–1893)
“Cease to ask what the morrow will hold and count as gain each day that Fortune grants.”
—Horace [Quintus Horatius Flaccus] (65–8 B.C.)