A realized capital gain is
A)the difference between the price of a share of stock and what the investor paid for it (i.e., the broker's fee)
B)the difference between the original value of a piece of equipment and its depreciated value
C)an increase in the net worth of a sole proprietorship or partnership
D)an increase in the market value of a share of stock held by an individual
E)the difference between the selling price and the purchase price of a share of stock

Question

Quizplus · Accepted Answer

A realized capital gain is the difference between the selling price and the purchase price of a share of stock. A is incorrect because the broker's fee is not part of the calculation. B is incorrect because it refers to depreciation of equipment, not investments. C is incorrect because it refers to an increase in net worth, not specifically related to investments. D is incorrect because it refers to an increase in market value, which is not necessarily realized until the stock is actually sold.

A Realized Capital Gain Is