CAPITAL GAINS TAX Meaning and
Definition
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Capital gains tax is a type of tax levied by governments on the profits gained from the sale or disposal of an asset, known as a capital asset, that has increased in value during its ownership. It is essentially a tax on the increase in the value of an investment, rather than the investment itself. This tax is applied to various types of capital assets such as real estate, stocks, bonds, and mutual funds, as well as other forms of investment and personal property.
The capital gains tax is calculated by subtracting the original purchase price, also known as the cost basis, from the selling price or fair market value at the time of disposal. The resulting profit, known as the capital gain, is subject to taxation at a predetermined rate set by the government. The tax rate for capital gains may vary depending on factors such as the length of time the asset was held, the individual's tax bracket, and the jurisdiction in which the transaction occurs.
The purpose of capital gains tax is to capture a portion of the profits made from investment activities, thereby generating revenue for the government. It is designed to ensure that individuals who benefit from the appreciation of capital assets contribute their fair share in taxes. The revenue generated from capital gains tax may be used to fund public services, infrastructure development, or other government initiatives.
Common Misspellings for CAPITAL GAINS TAX
- xapital gains tax
- vapital gains tax
- fapital gains tax
- dapital gains tax
- czpital gains tax
- cspital gains tax
- cwpital gains tax
- cqpital gains tax
- caoital gains tax
- calital gains tax
- ca-ital gains tax
- ca0ital gains tax
- caputal gains tax
- capjtal gains tax
- capktal gains tax
- capotal gains tax
- cap9tal gains tax
- cap8tal gains tax
- capiral gains tax
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