What do we call the profit made from the sale of stocks, bonds, or real estate?

The profit made from the sale of stocks, bonds, or real estate is referred to as capital gains. This term specifically pertains to the increase in value of an asset when it is sold for a higher price than it was purchased. For example, if an individual buys stock for $50 per share and later sells it for $75 per share, the difference of $25 represents capital gains.

Understanding capital gains is crucial in personal finance, as they can influence investment strategies and tax implications. Capital gains are typically taxed differently than ordinary income, which can affect an investor's overall tax liability. This knowledge helps individuals make informed decisions about when to buy or sell their investments.

The other terms mentioned are not applicable in this context. Returns are a broader concept that encompass any profit from investments, including both capital gains and dividends. Capital losses refer to losses incurred when an asset is sold for less than its purchase price, which is the opposite of capital gains. Dividend income refers specifically to payments made by companies to their shareholders and does not pertain to selling an asset. Thus, capital gains distinctly captures the profit from selling investments like stocks, bonds, or real estate.