Glossary

Capital Loss

The capital loss is a decrease in the value of capital assets. If the purchasing cost is higher than the selling price, the result is capital loss. One can claim capital losses from the sale of real assets, such as machinery and equipment, or financial assets, such as bonds. Capital loss may be incurred by the sale of intangible assets such as trademarks. Capital losses, like gains, are also defined as short-term and long-term, in view of the period the assets are held. Short-term capital loss is incurred on investments that are held less than 1 year. Capital assets that are sold after the period of 12 months are considered long-term.