Return Of Capital

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DEFINITION of 'Return Of Capital'

A return from an investment that is not considered income. The return of capital is when some or all of the money an investor has in an investment is paid back to him or her, thus decreasing the value of the investment.

BREAKING DOWN 'Return Of Capital'

This is not considered an investment gain of any type because it is not in excess of the original investment. Investors are not taxed on this return until it begins to exceed their original investment value.

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