Capital Gain - An increase in the value of a capital asset that gives it a higher worth than the initial purchase price.

A realized capital gain is a capital asset that has been sold at a profit. An unrealized capital gain is a capital asset that hasn't been sold yet but would result in a profit if sold. Capital gain is often used to mean realized capital gain.

For most investments sold at a profit, including real estate, stocks, bonds, options, collectibles, and businesses, the IRS is owed money called capital gains tax.

The capital gains tax is levied at rates varying between 5% and 35% for federal taxes depending on the circumstances of gain.

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