Browse Capital Gains and Basis

Capital Gains and Basis

Terms for gain, loss, and basis calculations that determine the taxable result when property is sold or exchanged.

Capital gains and basis pages explain how tax law measures gain or loss when property is sold. These terms often matter when investments, business assets, or personal-use property create a reporting event.

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What This Section Covers

  • The starting basis figure and the realized amount compared against it.
  • Why gain is not simply the same thing as sale proceeds.
  • The vocabulary behind asset dispositions and taxable profit calculations.

In this section

  • Adjusted Basis
    Adjusted basis is the updated basis figure used after tax-relevant changes alter the original cost basis of an asset.
  • Capital Gain
    A capital gain is the taxable profit that can result when property is sold for more than its tax basis.
  • Capital Loss
    A capital loss is the loss that can result when a capital asset is sold or exchanged for less than its tax basis.
  • Cost Basis
    Cost basis is the starting tax value used to measure gain or loss when property is later sold or otherwise disposed of.
  • Long-Term Capital Gain
    A long-term capital gain is a capital gain on property held long enough to fall into the long-term holding-period category.
  • Short-Term Capital Gain
    A short-term capital gain is a capital gain on property held for a shorter holding period and is contrasted with long-term capital gain treatment.
  • Wash Sale Rule
    The wash sale rule is the tax rule that can limit or defer recognition of a loss when substantially similar securities activity occurs too closely around the sale.