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Capital Gain

The difference between a security's purchase price and its selling price, when the difference is positive. The profit made on the sale of an asset whose value has improved throughout the holding term. A car, a business, or tangible or intangible property like shares are all examples of assets. Only when the asset's selling price exceeds its original acquisition price is a capital gain feasible. A capital loss happens when the buying price is higher than the sale price. Taxation on capital gains is common, and rates and exemptions may vary between nations. A variety of economic philosophers have characterized the evolution of capital gain, which began at the inception of the modern economic system, as complex and diverse. The idea of a capital gain may be compared to other important economic ideas like profit and rate of return, but it differs from those ideas in that anybody can accumulate capital gains via the routine acquisition and disposition of assets, not just corporations.

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