Capital Gain

Definition - What does Capital Gain mean?

Capital gain simply refers to the difference between the actual cost (plus improvements made) and the selling price. Taxes on capital gains can be shocking to owners, as the value of property may rise substantially due to factors like inflation.

Justipedia explains Capital Gain

Example: If a man buys a house for $19,000 in 1950, and now wants to sell it at his retirement for $450,000, in this case he would be subject to a huge amount of tax on his gains. However, there are some legal "cushions" that aim to protect such an individual (usually over 55) from huge taxes on capital gains.

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