A capital loss occurs when the value of an investment decreases below its purchase price and is realized when the asset is sold. This can occur in any asset class like stocks, bonds, or real estate. For taxation purposes, capital losses can often offset capital gains, thereby reducing the taxable income of an investor. Recognizing how to manage capital gains and losses can significantly affect an investor’s net returns and tax liabilities.
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About the author
Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
Her insights simplify complex financial topics into actionable strategies for beginners and seasoned traders alike.