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Capital gain
Glossaries
| Term | Main definition |
|---|---|
| Capital gain | The profit from selling your stock at a higher price than the price for which it was purchased. For example, if you buy 50 shares of Rocky and Bullwinkle stock at $20 per share and two years later you sell your shares when the price rises to $25 per share, your profit or capital gain is $5 per share, or $250. If you hold this stock outside of a tax-sheltered retirement account, you’ll owe federal tax on this profit when you sell the stock. Many states also levy such a tax.
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