Capital Gain Or Loss
A capital gain is the profit earned from selling an asset at a higher price than its purchase price, while a capital loss occurs when an asset is sold for less than its purchase price. Capital gains are subject to taxation, depending on the holding period and other factors. On the other hand, capital losses can be used to offset capital gains, reducing the overall tax liability. This strategy, known as tax-loss harvesting, helps investors minimize taxes by balancing gains and losses in their portfolio.
Related Terms
Internal Rate Of Return
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Foreign Portfolio Investment
Foreign Portfolio Investment (FPI) refers to investments in stocks, bonds, ETFs, derivatives, and other financial...
Information Ratio
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Equity Options
An equity option is a type of derivative contract that gives the holder the right,...
Liquidity Ratio
The Liquidity Ratio is a financial metric used to assess a company’s ability to meet...
Liquidity Risk
Liquidity risk is the chance a company can’t meet its debt obligations due to insufficient...
