Capital Gains Tax

Filed Under » ,
Dictionary Says

Definition of 'Capital Gains Tax'

A type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price. 

Capital gains taxes are only triggered when an asset is realized, not while it is held by an investor. An investor can own shares that appreciate every year, but the investor does not incur a capital gains tax on the shares until they are sold. 
Investopedia Says

Investopedia explains 'Capital Gains Tax'

Most countries' tax laws provide for some form of capital gains taxes on investors' capital gains, although capital gains tax laws vary from country to country. In the U.S., individuals and corporations are subject to capital gains taxes on their annual net capital gains.

It is important to note that it is net capital gains that are subject to tax because if an investor sells two stocks during the year, one for a profit and an equal one for a loss, the amount of the capital loss incurred on the losing investment will counteract the capital gains from the winning investment.

Video Definition

Search results for

'Capital Gains Tax'

  • Capital Gains Tax 101

    http://www.investopedia.com/articles/00/102300.asp
    Capital Gains Tax 101. ... This cut is the capital gains tax. For tax purposes, it is
    important to understand the difference between realized and unrealized gains. ...

  • Capital Gains Tax Cuts For Middle Income Investors

    http://www.investopedia.com/articles/pf/07/capitalgains.asp
    Capital Gains Tax Cuts For Middle Income Investors. ... The first steps toward a zero
    capital gains tax for middle-income investors were taken in 2003. ...

  • Avoid Capital Gains Tax On Your Home Sale

    http://www.investopedia.com/articles/06/section1031exchange.asp
    If you have property to sell and want to avoid capital gains tax, a Section 1031
    exchange may be the answer. ... Avoid Capital Gains Tax On Your Home Sale. ...

  • A Tax Primer For Homeowners

    http://www.investopedia.com/articles/pf/06/mortgagepoints.asp
    ... Prior to May 7, 1997, homeowners were required to pay capital gains tax on profits
    from the sale of a home, unless the proceeds were used to purchase a more ...

  • What You Need To Know About Capital Gains And Taxes

    http://www.investopedia.com/articles/tax/09/tax-effects-capital-gains.asp
    ... The next big consideration when thinking about capital gains and investment
    taxation is whether the account is taxable or tax-free. ...

  • Is it true that you can sell your home and not pay capital gains ...

    http://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp
    When you sell your home, the capital gains on the sale are exempt from capital gains
    tax. ... Is it true that you can sell your home and not pay capital gains tax? ...

  • Avoid Tricky Tax Issues On Municipal Bonds

    http://www.investopedia.com/articles/06/munibond.asp
    ... Tutorial: The Basics Of Bonds Municipal Bonds can be Subject to Capital Gains Tax
    When buying muni bonds on the secondary market, investors must be aware that ...

  • 7 Year-End Tax Planning Strategies

    http://www.investopedia.com/articles/tax/09/offset-capital-gains.asp
    ... from their non-Roth retirement plans, may now find themselves in a low tax bracket
    and possibly eligible for the 0% or 5% tax rate on capital gains if they ...

  • Series 66 Study Guide - Analyzing Your Client's Financial Profile ...

    http://www.investopedia.com/exam-guide/series-66/analyzing-financial-profile/netting-capital-gains-losses-wash-sales.asp
    ... contains valuable information on how to perform tax-loss harvesting to help reduce
    taxes on portfolio gains. ... stocks could be sold for a capital gain ...

  • How To Reduce Taxes On ETF Gains

    http://www.investopedia.com/articles/exchangetradedfunds/08/etf-taxes-introduction.asp
    ... Similarly, you should consider holding those ETFs with gains past their one-year
    anniversary to take advantage of the lower long-term capital gains tax rates. ...

Related Articles

Trading Center
Partner Links