Return On Capital Gains

AAA

DEFINITION of 'Return On Capital Gains'

The return that one gets from an increase in the value of a capital asset (investment or real estate). The return on capital gain is the measure of the investment gain for an asset holder, relative to the cost at which an asset was purchased. More specifically, return on capital gains is a measure of return on realized gains, after consideration for any taxes paid, commissions or interest.

INVESTOPEDIA EXPLAINS 'Return On Capital Gains'

Return on capital gains is measured on realized gains recognized from the sale or maturity of an investment asset, net of costs. For example, selling a stock for $10, which was purchased for $5, while accounting for a total of $2.50 in commissions and applicable taxes, would equate to a 50% return on capital gains. Other investment measures tend to measure returns of unrealized gains, which is why some may prefer to use return on capital gains, instead.

RELATED TERMS
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Capital Gains Yield

    The price appreciation component of a security's (such as a common ...
  3. Capital Asset

    A type of asset that is not easily sold in the regular course ...
  4. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  5. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  6. Capital Appreciation Fund

    A mutual fund that attempts to increase asset value primarily ...
Related Articles
  1. Retirement

    Rolling Over Company Stock: A Decision To Think Twice About

    It may be more beneficial for you to pay tax now than deferring it to an IRA. We show you how and why.
  2. Mutual Funds & ETFs

    Will A New Fund Manager Cost You?

    Learn how a change in leadership could mean more taxes for you.
  3. Mutual Funds & ETFs

    Benchmark Your Returns With Indexes

    If your portfolio is always falling short, you may not be making an apples-to-apples comparison.
  4. Taxes

    Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.
  5. Fundamental Analysis

    Why Dividends Matter

    Seven words that are music to investors' ears? "The dividend check is in the mail."
  6. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.
  7. Mutual Funds & ETFs

    Want Emerging Market REIT Exposure? Eye These ETFs

    It's possible (and easy) to invest in emerging market real estate from the United States — just look at these REIT ETFs.
  8. Trading Strategies

    The Top Five Stocks For Novice Swing Traders

    New to Swing Trading? Here are the top five stocks recommended for swing trading.
  9. Options & Futures

    Advantages Of Trading Futures Over Stocks

    We look at the top eight advantages of trading futures over stocks.
  10. Personal Finance

    Why These Could Be 2015's 10 Best REITs

    If you want to get on the REIT money train, then you better hurry up. However, the REITs covered here have potential beyond 2015.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center