What is defined as the profit received from the sale of property?

The term that refers to the profit received from the sale of property is capital gain. Capital gain represents the difference between the selling price of an asset and its original purchase price, when the selling price exceeds the purchase price. This concept is crucial in real estate transactions, as understanding capital gains affects tax liabilities and investment returns for sellers. When a property is sold for more than its acquisition cost, the seller realizes a profit, and that profit is categorized as a capital gain, which may be subject to taxation depending on the holding period and specific tax regulations.

In contrast, capital loss refers to losing value when a property is sold for less than its purchase price, which is the opposite of a gain. Capital expense pertains to the money spent on acquiring or improving a property, which is not the same as profit. Lastly, equity investment describes an ownership stake in an asset but does not directly refer to profits made from selling property. Understanding these terms is essential for grasping the financial implications of real estate transactions.