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capital gain


Definition

The amount by which an asset's selling price exceeds its initial purchase price. A realized capital gain is an investment that has been sold at a profit. An unrealized capital gain is an investment that hasn't been sold yet but would result in a profit if sold. Capital gain is often used to mean realized capital gain. For most investments sold at a profit, including mutual funds, bonds, options, collectibles, homes, and businesses, the IRS is owed money called capital gains tax. opposite of capital loss.

Featured Tip

A Mutual Fund's Turnover RateBefore investing in a mutual fund, consider its portfolio turnover rate. A fund's portfolio turnover rate measures the frequency with which it buys and sells securities. A fund that rapidly buys and s ... Read more


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