1. What Are Capital Gains?

Capital gains represent the profit earned from selling an asset for more than its purchase price. This calculator helps estimate potential gains from investments before making selling decisions.

2. How the Calculator Works

The calculator uses the capital gains formula:

Where:

• \( Current\ Price \) — Current market price of the asset
• \( Purchase\ Price \) — Original purchase price of the asset
• \( Quantity \) — Number of units owned

Explanation: The formula calculates both total dollar gains and percentage appreciation to give a complete picture of investment performance.

3. Importance of Calculating Gains

Details: Understanding potential gains helps with tax planning, investment strategy decisions, and portfolio rebalancing. It's essential for both short-term traders and long-term investors.

4. Using the Calculator

Tips: Enter accurate purchase and current prices in USD, along with the quantity of assets held. The calculator will show total expected gains, per-unit appreciation, and percentage return.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between realized and unrealized gains?
A: Unrealized gains (calculated here) are paper profits before selling. Realized gains occur after selling and may have tax implications.

Q2: Are there different tax rates for capital gains?
A: Yes, most countries have different rates for short-term (usually <1 year) and long-term holdings. Consult a tax professional.

Q3: Should I include fees in the calculation?
A: For precise calculations, subtract purchase/selling fees from gains. This calculator shows gross gains before fees.

Q4: How often should I calculate my gains?
A: Regular monitoring (monthly/quarterly) helps track performance, but avoid overreacting to short-term fluctuations.

Q5: Can this calculator predict future gains?
A: No, it calculates based on current prices. Future performance may differ due to market conditions.