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What is the difference between a net capital gain and a capital gain? Are net capital losses deductible

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Question - What is the difference between a 'net capital gain' and a 'capital gain, and between a 'net capital loss' and a 'capital loss'? Are net capital losses deductible?

Answer -

Net capital gain

Capital gain

Net capital gain is a specific type of gain that can define a particular amount. However, this amount is a total summation of long term and short time gain of capital that is related with any types of exchange and transaction of several trusts, organization and association. (Cashinet al. 2017)

Capital gain is a different kind of gain that depends on incrementation of a value of capital from various assets.

Calculation process of net capital gain is-

1. Subtract cost based on all sales

2. Reduce all costs related with actual capital

3. Apply several sales or discount for different product

Calculation process of capital gain is-

Capital gain = Final selling price-(total acquisition cost+cost of transfer+improvement cost of house)

Table 1: Difference between net capital gain and capital gain

Net capital loss

Capital loss

Net capital loss is a type of loss that depends on several properties related to capital such as- share,  buildings, mutual funds, land. However, this loss is applied with gains of capital that determine current income tax years subsequently.

Capital loss is a certain type of loss that is collected in that time when a particular capital asset is available for sale with less than actual price of purchase.

Calculation process of net capital loss-

1. Capital loss= total price of purchase+sale price

2. Assume net capital loss of previous year and unutilized capital losses related with tax year thai is current. 

3. Net capital loss for next year=capital loss+net capital loss of previous year.

Capital loss= total price of purchase+sale price

Table 2: Difference between net capital loss and capital loss

Net capital losses are deductible but there are some limitations to reduce net capital loss from several stocks that decrease amount of tax bill.


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