Capital Gain

The term refers to an increase in the value of real estate higher than the purchase price. The gain materializes upon the sale of the asset. Capital gains can be short-term (a year or less) or long-term (a year+); income taxes on the latter are usually lower than those paid on regular income. This is intended to foster entrepreneurship and investment.

Please note: it is always prudent to consult your CPA about issues of tax liability.