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Capital gains are the profits you make from selling an asset, like stocks or real estate, for more than you paid for it.
In Depth
When you sell an investment or property for a higher price than your original purchase price, the difference is considered a capital gain. These gains are typically subject to taxes, which can vary depending on how long you owned the asset (short-term vs. long-term). Understanding capital gains is important for investors to properly calculate their tax obligations and investment returns.
Example
If you buy a stock for $50 and sell it for $75, you have a capital gain of $25.