--- title: Capital Gain Definition | Define Long & Short Term Capital Gains description: A Capital Gain is an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the basis of the asset. image: https://www.realized1031.com/hubfs/social-suggested-images/Realized_Glossary_Graphic-2.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Capital Gain Capital gain is an increase in the value of a [capital asset](https://www.realized1031.com/glossary/capital-asset) (investment or real estate) that gives it a higher worth than the [basis](https://www.realized1031.com/glossary/basis) of the asset. Capital gains can also be thought of as the profit from the sale of a capital asset where the sale price exceeds the asset’s [adjusted basis](https://www.realized1031.com/glossary/adjusted-basis). Short-term capital gains, which generally applies to assets held for less than one year, are taxed at an investor’s [ordinary income](https://www.realized1031.com/glossary/ordinary-income) rate. Long-term capital gains, which generally applies to assets held for greater than one year, are subject to [capital gains tax](https://www.realized1031.com/glossary/capital-gain-tax), which is generally lower than the ordinary income rate. As an example capital gain calculation, if a taxpayer purchased an investment property for $1,000,000 and claimed $200,000 of [depreciation](https://www.realized1031.com/glossary/depreciation) over their [holding period](https://www.realized1031.com/glossary/holding-period) (resulting in an $800,000 adjusted basis), and subsequently sold the asset for $1,200,000, the taxpayer’s capital gain would be $400,000 (sales price less adjusted basis). Download The Capital Gains Tax Calculator [![Cap Gains Calculator For Investors](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/laptop-capital-gains-calculator-spreadsheet.jpg?width=500&height=290&name=laptop-capital-gains-calculator-spreadsheet.jpg "Estimate the cap gains tax owed ...") ](https://www.realized1031.com/glossary/capital-gain#blogform) Download Calculator ---   --- ### Cap Gains Calculator For Investors ![Download The Capital Gains Tax Calculator](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/laptop-capital-gains-calculator-spreadsheet.jpg?width=500&height=290&name=laptop-capital-gains-calculator-spreadsheet.jpg) Estimate the cap gains tax owed after selling an asset or property By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. 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Short-term capital gains, which generally applies to assets held for less than one year, are taxed at an investor’s ordinary income rate. Long-term capital gains, which generally applies to assets held for greater than one year, are subject to capital gains tax, which is generally lower than the ordinary income rate. As an example capital gain calculation, if a taxpayer purchased an investment property for $1,000,000 and claimed $200,000 of depreciation over their holding period (resulting in an $800,000 adjusted basis), and subsequently sold the asset for $1,200,000, the taxpayer’s capital gain would be $400,000 (sales price less adjusted basis).", "author" : { "@type" : "Organization", "email" : "marketing@realized1031.com", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2022-06-20T15:44:40+0000", "datePublished" : "2022-06-20T15:44:40+0000", "description" : "A Capital Gain is an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the basis of the asset.", "headline" : "Capital Gain", "image" : { "@type" : "ImageObject", "height" : 627, "url" : "https://cdn2.hubspot.net/hubfs/733513/social-suggested-images/Realized_Glossary_Graphic-2.jpg", "width" : 1200 }, "mainEntityOfPage" : "https://www.realized1031.com/glossary/capital-gain", "name" : "Capital Gain", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" } } ```