What is capital gain/loss?

Capital Gain = Sales Price - Purchase Price (All inclusive).

The word 'capital gain' describes the increase in a capital asset's value upon sale. Simply put, a capital gain occurs when you sell an asset for more than what you purchased it for.

• For example, if a person buys 100 shares at a rate of $50 each (total share cost $ 5,000) and sells the same stock for $100 each (total share cost $10,000), then the revenue of $5,000 is considered a capital gain. 

Capital Loss = Purchase Price - Sale Price.

A loss made when the value of a capital asset, such as an investment or piece of real estate, decreases is known as a 'capital loss'. This loss will not be realized until the asset is sold for a price less than the initial acquisition price.

• For example, if an investor buys a car for $200,000 and sells it four years later for $150,000, the investor suffers a $50,000 capital loss.