capital-gains
UK[ˈkæp.ɪ.təl ɡeɪnz]US[ˈkæp.ə.t̬əl ɡeɪnz]
noun phrase
The profit that is made from the sale of an asset, such as property or stocks, when the selling price exceeds the original purchase price.
Morpheme Breakdown
capital
gains
capital
wealth
gains
increases
Etymology
The term is a modern financial compound formed from two distinct historical roots. "Capital" traces back to the Latin caput (head), evolving through capitalis to signify the principal source or fund, the "head" of one's wealth. "Gain" entered English from Old French, carrying its Germanic sense of profit or increase. Combined, the phrase literally denotes the "profit from principal assets," a logical evolution where the concept of the primary fund (capital) meets the outcome of its increase (gain). This compound perfectly encapsulates the core transaction in investment economics: the positive difference realized upon the disposal of a capital asset.
Analysis
Structure: capital (wealth) + gains (increases)
- capital: From Latin capitalis (of the head, chief, principal), from caput (head). In this compound, it functions as an adjective modifying the type of "gains," referring to wealth or principal assets.
- gains: From Old French gaaigne (profit, gain), of Germanic origin. It functions as the head noun in the compound, meaning profits or increases in value.
Examples
He had to pay a significant amount of tax on the capital gains from the sale of his company shares.
Long-term capital gains are often taxed at a lower rate than short-term gains.
The investor's portfolio showed substantial unrealized capital gains during the market boom.