Taxable Event

AAA

DEFINITION of 'Taxable Event'

Any event or transaction that results in a tax consequence for the party who executes the event. Common examples of taxable events for investors include receiving interest and dividends, selling securities for a gain and exercising options.

INVESTOPEDIA EXPLAINS 'Taxable Event'

Investors should focus on limiting their taxable events, or at least minimizing high tax rate events while maximizing low tax rate ones.

Holding on to profitable stocks for more than a year (to eliminate short-term capital gains) is one of the easiest ways to minimize the effects of taxable events.

RELATED TERMS
  1. Inherited Stock

    A stock that an individual obtains through an inheritance after ...
  2. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  3. Cost Basis

    1. The original value of an asset for tax purposes (usually the ...
  4. Paper Profit (Paper Loss)

    Unrealized capital gain (or capital loss) in an investment. It ...
  5. Realized Loss

    A loss is recognized when assets are sold for a price lower than ...
  6. Realized Gain

    A gain resulting from selling an asset at a price higher than ...
Related Articles
  1. How and when can you convert a Registered ...
    Retirement

    How and when can you convert a Registered ...

  2. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  3. Forex Taxation Basics
    Forex Education

    Forex Taxation Basics

  4. Capital Gains Tax 101
    Taxes

    Capital Gains Tax 101

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center