Capital gains refer to the profits earned when assets like real estate, stocks, bonds, or other investments are sold for more than their original purchase price.
These gains represent the increase in value of the asset over time and are realized only when the asset is actually sold.
Capital gains can be short-term or long-term, depending on how long the asset was held before being sold, and they are often subject to taxation. Investors and property owners aim to generate capital gains as a source of income or wealth accumulation.
Understanding capital gains is important for financial planning and investment strategy.