Capital Gain

The capital gain is the difference between the sell price of an asset, that is the property of the individual, and the original purchase price of that item. When referred to as a capital gain the purchase price is less than the sell price, which means that the asset has been sold at a profit. The tax imposed on this profit is called capital gain tax. Capital gain tax is applied to profit that is usually made by the selling of mutual funds, business, homes, securities and other items of personal property that are not specifically exempt.