This refers to profit that results from a sale of a capital asset, such as stock, bond or real estate, where the sale price exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Conversely, a capital loss arises, if the proceeds from the sale of a capital asset are less than the purchase price.

Capital gains may be referred to as a different form of profit received from an asset, which refers to “investment income” in the form of cash flow or passive income that arises in relation to real assets, to such as property, financial assets, such as shares/stocks to bonds and intangible assets.

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