DEFINITION of 'Taxable Gain'

A profit on the sale of an asset that is subject to taxation. Such gains are subject to capital gains tax, under which rate and application differ from country to country and from asset to asset. Taxable gains are generally realized from the sale of financial assets such as stocks and bonds, as well as other assets including real estate and personal property.

BREAKING DOWN 'Taxable Gain'

A taxable gain can generally be offset against a tax loss, so as to reduce the amount of tax payable. In the U.S., gains on assets that have been held for more than a year before being sold are classified as long-term capital gains, and are taxed at a more favorable rate than short-term capital gains.

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