Explanation of "Capital Gain"
Definition:
"Capital gain" is a noun that refers to the profit you make when you sell something, like property or stocks, for more than you paid for it. In simpler terms, it's the extra money you earn when you sell an item at a higher price than you bought it.
Advanced Usage:
In finance, capital gains can be classified as short-term or long-term, depending on how long you held the asset before selling it. Short-term capital gains usually apply to assets sold within a year and are often taxed at a higher rate than long-term capital gains, which apply to assets held for more than a year.
Word Variants:
Capital Loss: This is the opposite of capital gain. It occurs when you sell an asset for less than you paid for it.
Capital Gains Tax: This is a tax that you may need to pay on the profit you make from selling your assets.
Different Meanings:
In a broader context, "capital" can refer to the financial resources or assets available for investment or use in a business. "Gain" can also refer to any increase in value or improvement in a situation, not just in financial terms.
Synonyms:
Idioms and Phrasal Verbs:
"Cash in on": This means to take advantage of a situation to make a profit. For example, "She decided to cash in on her investment when the market was high."
"Make a killing": This idiom means to make a lot of money quickly. For example, "He made a killing by selling his stocks at the right time."
Summary:
"Capital gain" is an important term in finance that helps you understand how to make money from investments. Remember, it refers to the profit you make when selling an asset for more than you bought it.