A capital gain is the profit resulting from a sale or exchange of a capital asset, wherein the capital asset could be real estate, stock or bond. Most commonly, capital gains are realized from the sale of stocks, bonds, precious metals, and property.
A capital gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes.Explore Definition
Short-term capital is realized on the sale or exchange of an asset held for less than a specified period (as a year) that is treated as ordinary income under federal income tax laws. Whereas, a long-term capital gain is realized on the sale or exchange of an asset held for more than a specified period (as a year).