Capital Gains
Educational only, not financial advice.
A capital gain is the profit made when you sell an investment for more than you paid for it. If you sell for less, that's a capital loss instead.
Why it matters
- Capital gains in non-registered (taxable) accounts are generally subject to tax, though rules and rates vary by country.
- A gain is only 'realized' — and taxable — once you actually sell; unsold gains are 'unrealized.'
- Capital losses can often be used to offset capital gains for tax purposes (tax-loss harvesting).
Simple example
- Buying a stock for $1,000 and selling it later for $1,400 creates a $400 capital gain.
- In a registered account like a TFSA, that same $400 gain would not be taxed at all.
How beginners use this
In taxable accounts, selling can trigger tax; registered accounts change the timing. Canada overview: Capital gains tax (Canada).
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Reviewed by Greg Parsons. Links checked October 14, 2026. Educational only, not financial advice.