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The difference between the amount of money recieved from selling an investment an purchasing investment is?


The difference between the amount of money recieved from selling an investment an purchasing investment is?

A capital gain or a capital loss depending on if you made or lost money on your investment.

For most investors, this is usually called a capital gain. For people who are in the business of buying and selling stocks, it may be classified as revenue. Capital gains may be short-term or long-term, with long-term capital gains subject to a lower income tax in the US. Some countries do not impose a tax on capital gains. In the US, you have to hold the investment more than one year to qualify as a long-term gain.

If you are in the US it also depends on the type of account you are doing this in and the time period you held the investment for. If it is a tax-deferred or tax-free account such as a 401k or Traditional/Roth IRA you have neither a gain or loss, because you pay your taxes when you withdraw the money, this is the big advantages to these.

If your investment is in a brokerage account this is where you have the capital gain or loss. Typically with stock investments if you hold the security less then a year and sell, it is a short-term gain or loss subject to ordinary income tax. If you hold the security over a year it is a long-term gain or loss subject typically to a 15% tax.

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