Capital Loss Definition:

The amount of monies lost when disposing of an asset, the difference between the higher purchase cost and the subsequent but lower amount received when the asset was sold.

When an asset designated by the taxation authority is stated to be a capital asset is sold, the difference between the original cost of the asset and the amount it is sold, when a negative amount, is a capital loss.

A capital loss may qualify the tax-payer to a tax deduction or credit whereas a capital gain is usually taxable.

If a profit is realized in the sale or disposition of a capital asset, it is a capital gain.

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