Capital Gain
A gain measured against adjusted basis, with realization and tax treatment determined by transaction details and jurisdiction.
A capital gain is the excess of disposition proceeds or deemed value over an asset adjusted tax basis, subject to applicable rules. Basis can include purchase price, fees, reinvested distributions, corporate actions, depreciation, currency effects, gifts, inheritance, and lot-selection methods.
Frequently Asked Questions
Is every increase in market value taxable immediately?
Not necessarily. Many systems distinguish unrealized gains from taxable realizations, but deemed dispositions, mark-to-market regimes, funds, derivatives, expatriation, and other rules can create exceptions.
Are short-term and long-term gains always separated at one year?
No. That is a common U.S. federal framework for many assets, but holding periods, rates, exclusions, and asset-specific rules vary by jurisdiction and can change.
Does reinvesting sale proceeds defer capital-gains tax?
Usually not without a specific statutory provision or tax-advantaged account. Selling can trigger realization even when proceeds are immediately reinvested, but rollover, exchange, retirement-account, and jurisdiction-specific rules may differ.
Can capital losses always offset gains and ordinary income?
No. Netting order, annual limits, carryforwards, wash-sale or superficial-loss rules, related-party restrictions, and asset classifications vary by tax system.