1. What is Capital Gain?

Capital Gain is the profit realized from the sale of a capital asset such as stocks, bonds, or real estate. It's calculated as the difference between the selling price and the original purchase price of the asset.

2. How Does the Calculator Work?

The calculator uses the simple capital gain formula:

Where:

• Sell Price — The price at which the asset was sold (USD)
• Buy Price — The original purchase price of the asset (USD)

Explanation: The formula simply subtracts the original purchase price from the selling price to determine the profit or gain.

3. Importance of Capital Gain Calculation

Details: Calculating capital gains is essential for tax purposes, investment analysis, and financial planning. It helps investors understand their investment performance and potential tax liabilities.

4. Using the Calculator

Tips: Enter the sell price and buy price in USD. Both values must be positive numbers. The calculator will compute the capital gain (or loss if negative).

5. Frequently Asked Questions (FAQ)

Q1: What if my capital gain is negative?
A: A negative result indicates a capital loss, meaning you sold the asset for less than you paid for it.

Q2: Are there different types of capital gains?
A: Yes, short-term (assets held ≤1 year) and long-term (assets held >1 year) gains are taxed differently in many jurisdictions.

Q3: Does this include transaction costs?
A: No, this is a basic calculation. For precise calculations, you should include brokerage fees and other transaction costs.

Q4: How is capital gain different from return on investment?
A: Capital gain only considers price difference, while ROI typically includes dividends/interest and is expressed as a percentage.

Q5: What about inflation-adjusted capital gains?
A: This calculator shows nominal gains. For real (inflation-adjusted) gains, you would need to adjust the buy price for inflation.