Investing Basics

What Is a Capital Gain?

A capital gain is the profit from selling an asset, such as a stock, bond, or property, for more than its cost basis. If the asset is sold for less than its basis, the result is a capital loss. A gain is realized when the asset is sold; before that it is an unrealized, or paper, gain.

Formula

Capital gain = sale price − cost basis. The cost basis is generally the purchase price plus certain acquisition costs.

Example

Buying shares for 5,000 and selling them for 6,500 produces a 1,500 capital gain.

Taxes

Many countries tax realized capital gains, often at rates that depend on how long the asset was held.

🧮 Calculate It Yourself

Put Capital Gain into practice with these free calculators — no sign-up, nothing stored.

📈 Capital Gains Tax Calculator Compare short-term vs. long-term capital gains tax. Calculate → 📐 ROI Calculator Return on investment, net gain, and annualized ROI — any currency. Calculate →

🔗 Related Terms

Capital Gains Tax Return on Investment (ROI) Asset Dividend Yield

More Investing Basics Terms

📖 Browse all glossary terms or explore all free calculators.

Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.