Capital Gain

A simple concept, the Capital Gain is when the selling price is higher than the original purchase price. Dividends paid are not taken into consideration.

A Capital Gain is defined as the profit made when an asset is sold, as the selling price was higher than the original purchase price. If the selling price is lower than the original purchase price, this is a capital loss. A Capital Gain could be adjusted for inflation, which means that the original purchase price could be inflated or increased. There is the concept of an unrealised Capital Gains, where it is perceived that the asset, if sold could or should or will command a higher price. Always keep in mind the distinct difference between the two one is fact. The other is hope or perception. Further, a Capital Gain is not the Total Return as Dividends paid out are not taken into consideration.