Capital Gains equates to an increase in the worth of a capital asset, such as stocks, bonds or real estate, that gives it a greater value than the purchase price. The gain is not obtained until the asset is sold.

To be clear, the gain is the variance between a higher selling price and a lower purchase price.

A Capital Gain may be long-term (12 months or more), or short-term (12 months or less) and must be declared on income taxes.