What does capital gain net income mean on the CPA exam?
Capital gain net income. Capital gains minus capital losses for the year, long-term and short-term combined. Named almost identically to net capital gain and computed differently, and it is not the amount that carries the preferential rate.
Defined against Sec. 1222(9).
Which CPA exam sections use capital gain net income?
Capital gain net income appears in the REG section of the CPA exam.
Related terms
- net capital gain: Net long-term capital gain minus net short-term capital loss.
- capital loss: Loss on the sale of a capital asset.
- ordinary income: Income taxed at the regular graduated rates rather than at preferential capital gain rates.
- other comprehensive income: Gains and losses that bypass net income and sit in equity until realized, such as unrealized gains on available-for-sale debt securities and foreign currency translation.
- net investment income: Interest, dividends, capital gains, rents, royalties and income from passive businesses, less the deductions allocable to them.
- passive income: Income from an activity the taxpayer does not materially participate in, plus most rental income.