Investing basics
A capital gain or loss is the change between an asset's relevant purchase cost and its disposal value. It becomes realised when the asset is sold under the applicable accounting or tax convention.
Make it click
Keep the original receipt beside the later sale receipt. The difference shows the gain or loss, but costs, currencies and the rules for matching purchases can change the final calculation.
Now put that into markets
Markets show changing prices before a sale, creating unrealised gains or losses. Selling crystallises a transaction, after which fees and jurisdiction-specific tax rules may matter.
Return measurement should include purchase and sale prices, transaction costs, distributions and currency effects where relevant. Tax calculations may use different cost-basis rules from a performance report.
Separate nominal price change, total investment return and taxable gain. They can differ because dividends, reinvestment, fees, inflation and tax rules answer different questions.
An unrealised gain can reverse, while a realised gain is not automatically spendable profit after costs and tax. Rules vary and can change, so current personal treatment needs qualified guidance.
Takeaway
