Capital Loss

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This is the unfortunate opposite of capital gain. People invest to make financial gains, but sometimes the chosen investments perform badly and money is lost instead of being made. Losing money on an investment or on the sale of an asset is known as a capital loss. (Until the investment or asset is actually sold, the loss is merely a paper loss, but upon its sale the loss becomes a real, capital loss.) There is a silver lining to sustaining a capital loss: capital losses can be offset against subsequent capital gains so that no capital gains tax is owed on the gains until at least such time as the losses are equal to the gains. At that point the investor has been "made whole," and any further capital gains will generally be taxed in the normal way. See Tax Loss.