Question

What’s a capital gain or a capital loss?

Answer

A capital gain occurs when you sell a capital asset for more than what you paid for it.

A capital loss occurs when you sell a capital asset for less than what you paid for it. Most property is considered a capital asset, except these:

  • Inventory held for sale to customers
  • Depreciable business property
  • Real property used in a trade or business
  • Creative property like a copyright, literary work, musical, and so on
  • Accounts or notes receivable
  • Supplies used in a trade or business

Related Topics

Related Resources

Nontaxable Combat Pay

Learn more about combat pay exclusions and get tax answers at H&R Block.

Reporting Sales Of Stock On Your Taxes

Need to know how to report the sales of stock on your taxes? Learn more from the tax experts at H&R Block.

Farm Income Tax Implications | H&R Block

Learn more about farm income and how It affects your taxes from the tax experts at H&R Block.

Taxes On 401K Distribution

Learn more about taxes on 401K distribution with advice from the tax experts at H&R Block.