Capital Gain Or Loss
A capital gain is the profit earned from selling an asset at a higher price than its purchase price, while a capital loss occurs when an asset is sold for less than its purchase price. Capital gains are subject to taxation, depending on the holding period and other factors. On the other hand, capital losses can be used to offset capital gains, reducing the overall tax liability. This strategy, known as tax-loss harvesting, helps investors minimize taxes by balancing gains and losses in their portfolio.
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