Capital Loss
TaxGlossary term
Definition
A loss incurred when selling an asset for less than its purchase price. Capital losses can offset capital gains to reduce tax liability.
Related terms
- Capital GainsThe profit realized from selling an asset for more than its purchase price. Capital gains can be short-term (held less than a year) or long-term (held more than a year), with different tax implications.
- Tax DeductionAn expense that can be subtracted from gross income to reduce taxable income. Common deductions include mortgage interest, student loan interest, and charitable contributions.
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