Investments include mutual funds, bonds, stocks, options, precious metals, real estate, and collectibles. If you sold an investment for more than what you paid for it, then you have a gain. If you sold an investment for less than what you paid for it, then you have a capital loss. Your capital gains and losses are reported on IRS Form 1040 Schedule D (PDF), with the result carried to Form 1040.
Capital gains are calculated as follows:
- Selling price
- Minus Selling fees & commissions
- Minus Buying fees & commissions
- Minus Purchase price
- = Profit (or Loss if negative)