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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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62% - Often

Capital Gain


Synonyms:liquidating, profit by selling assets
Acronyms &
abbreviations:
CG
Filed Under: financial-banking, investments, taxation
Tags: accounting, finance, taxes
 

Definition of capital gain (CG)

capital gain (CG)
1. The profit that an owner makes when selling real estate or other capital asset. Capital gains receive more favourable tax treatment than regular income. Depending on your tax bracket and on how long you held an asset before selling it, you may pay about one-third to one-half less tax than you would have paid on the same amount if you had earned it as salary. See also "Capital Asset."

Related Terms and Acronyms:

  • adjusted basis   The amount you use to determine your profit or loss from a sale or exchange of property.
  • long-term capital loss   Your profit from the sale of a capital asset that you held for more than 12 months.
  • ordinary dividends   The distribution of a company's profits that are subject to full taxation.
  • ordinary income   Income that does not qualify as a capital gain including wages, interest, dividends, and net income from a business.
  • rate of return (ROR, RR)   The profit an investment generates, expressed as equity divided by cash flow.
  • recognized gain or loss   The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.
  • return on assets (ROA)   A ratio that shows how profitable a company is when compared to its assets.
  • return on equity (ROE)   A ratio that shows how profitable a company is when compared to shareholder equity.
  • return on investment (ROI)   The profit an investment generates, expressed as equity divided by cash flow.
  • short-term capital gain (STCG)   Your gain from the sale of a capital asset that you held for one year or less.

More Related Terms and Acronyms

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