Recognized Gain

DEFINITION of 'Recognized Gain'

When an investment or asset is sold for an amount that is greater than what was originally paid. Recognizing gains on an asset will trigger a capital gains situation, but only if the asset is deemed to be capital in nature.

The amount of any capital gain will need to be reported for income tax purposes, and is measured by the selling price minus the purchase price.

BREAKING DOWN 'Recognized Gain'

Recognizing gains on an asset simply means that you made money on selling a piece of property or an investment. Depending on the nature of the asset and the tax laws of your jurisdiction, the gain on the sale may or may not be taxable.

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RELATED FAQS
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  2. Are there high capital gains when there's low income?

    My father sold a piece of property that he inherited in order to pay for assisted living expenses. He ... Read Answer >>
  3. Do I have to pay capital gains tax if I invest my equity into a new home?

    I have owned and lived in my home for 14 months. I want to sell it and move into a bigger home. Can I invest my equity into ... Read Answer >>
  4. Are capital gains taxed differently in different countries?

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