Capital Gain
Definition
The profit earned from selling an asset for more than its purchase price.
Explanation
Capital gains are classified as short-term (held less than one year, taxed as ordinary income) or long-term (held over one year, taxed at preferential rates of 0%, 15%, or 20% depending on income). Tax-loss harvesting involves selling losing positions to offset capital gains. Unrealized capital gains (paper profits on unsold positions) are not taxed until realized. The step-up in basis at death eliminates unrealized capital gains for inherited assets — a significant estate planning consideration.
How Stoquity Uses This
Stoquity incorporates capital gain analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.