What "capital gain" means in finance

Capital gain refers to the profit obtained from the sale of a capital asset, such as stocks, bonds, real estate, or other investments. It is the difference between the purchase price and the selling price of the asset. Capital gains are subject to taxation in many countries, but the tax rate may vary depending on the type of asset and the holding period. Short-term capital gains are taxed at a higher rate than long-term capital gains, and some assets may be subject to special tax rules or exemptions. Capital gains are an important source of income for investors, and they can be reinvested or used for other purposes, such as paying off debts or funding future investments.