capital gains

The term capital gain refers to the increase in the value of a capital asset when it is sold. Capital gains are realized when you sell an asset for more than what you originally paid for it. Though capital gains are associated with investments like stocks and funds, they can also be realized on any type of assets like a home, furniture, or vehicle. Capital gains are of two categories – short-term and long-term. Short-term capital gains are profits realized on assets held for one year or less. Long-term capital gains are profits realized on assets held for more than one year.