What is a capital gain & loss?

When you sell a capital asset for a higher price than its original value, the money you make on that sale is called a capital gain. The money you lose is a capital loss. Most items people are considered "capital assets" by the IRS Internal Revenue Service. Topic No. 409, Capital Gains and Losses. Accessed Apr 30, 2024.

What if my capital losses exceed my capital gains?

If your capital losses exceed your capital gains, the amount of the excess loss that you can claim to lower your income is the lesser of $3,000 ($1,500 if married filing separately) or your total net loss shown on line 16 of Schedule D (Form 1040), Capital Gains and Losses. Claim the loss on line 7 of your Form 1040 or Form 1040-SR.

What is the difference between capital gains and capital losses?

Your net capital gain is the difference between your capital gains and your capital losses. For example, if you sold a stock for a $10,000 profit this year and sold another at a $4,000 loss, your net capital gain is $6,000. » Having trouble deciding whether to sell? A qualified financial advisor can help. What are capital gains taxes?