| profit from the sale of assets, as bonds or real estate. |
| capital gain n. The amount by which proceeds from the sale of a capital asset exceed the original cost. |
Personal income earned by the sale of assets, such as stocks or real property. The gain is the difference between the price paid for the asset and the selling price. Most conservatives want capital gains taxed at a lower rate than ordinary income in order to stimulate investment, whereas most liberals oppose a lower rate for capital gains as a subsidy for the wealthy.
Capital Gain
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year), and must be claimed on income taxes.
Investopedia Commentary
Long-term capital gains are usually taxed at a lower rate than regular income. This is done to encourage entrepreneurship and investment in the economy.
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See also: Asset, Capital Loss, Real Estate, Return On Capital Gains
capital gain