1031.Exchange INTELLIGENCE NETWORK
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TAX & BASIS

Capital gain

Also called: capital gains tax · gain on sale

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PLAIN-ENGLISH DEFINITION

Gain that receives capital-gain treatment under the tax rules.

What it means in practice.

Investment real estate dispositions can involve capital gain as well as depreciation-related items and potentially ordinary-income items depending on facts.

Why it matters.

A 1031 exchange analysis should model the character of gain, not just the total sale profit.

Additional notes.

Investment real estate dispositions can involve capital gain as well as depreciation-related items and potentially ordinary-income items depending on facts.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/publications/p544
CONNECTED LANGUAGE

Related definitions.

Tax & BasisRecognized gainThe portion of gain included currently for tax purposes.Tax & BasisUnrecaptured Section 1250 gainA category of long-term capital gain generally associated with depreciation taken on Section 1250 real property and subject to special tax-rate treatment.
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