Capital Loss for Dummies
noun
pronunciation: 'kæpɪtəl_lɔsWhat does Capital Loss really mean?
Sure thing! So, "capital loss" is kind of like when you buy something and then later on, you sell it for less than what you paid for it. Let me try to explain it in a different way. Imagine you buy a video game for $50, and then you find out that no one really wants to play it and you can only sell it for $30. So, you end up losing $20 because you didn't make back the full amount you spent on it. That's basically what a capital loss is – when you lose money because the thing you bought didn't end up being worth as much as you thought it would be. It can happen with all kinds of stuff, like stocks, bonds, or even real estate. So, it's important to be careful with how you spend and invest your money, so that you can try to avoid making a big capital loss.
When it comes to investing, "capital loss" also has a more official definition. It's when the price of an asset – which is just a fancy word for something that you own, like stocks or property – decreases from the amount that you paid for it. This means that the value or the worth of the thing you own has gone down, and if you were to sell it at that lower price, you'd end up losing some of your money. It's kind of like buying a rare toy for $100 and then later finding out that its value has dropped to $80 because it's not as rare as you thought it was. In that case, you'd have a capital loss of $20. So, that's the official financial definition of "capital loss."
I hope that makes sense to you! Let me know if you have any questions about it. It can be a tricky concept, but I'm here to help you understand it!
When it comes to investing, "capital loss" also has a more official definition. It's when the price of an asset – which is just a fancy word for something that you own, like stocks or property – decreases from the amount that you paid for it. This means that the value or the worth of the thing you own has gone down, and if you were to sell it at that lower price, you'd end up losing some of your money. It's kind of like buying a rare toy for $100 and then later finding out that its value has dropped to $80 because it's not as rare as you thought it was. In that case, you'd have a capital loss of $20. So, that's the official financial definition of "capital loss."
I hope that makes sense to you! Let me know if you have any questions about it. It can be a tricky concept, but I'm here to help you understand it!
Revised and Fact checked by Lily Wilson on 2023-11-13 18:59:02
Capital Loss In a sentece
Learn how to use Capital Loss inside a sentece
- If you buy a stock for $100 and later sell it for $80, you have a capital loss of $20.
- When you sell your car for less than what you paid for it, you experience a capital loss on the vehicle.
- If you invest money in a business and the business fails, resulting in a loss of your investment, that is a capital loss.
- When you sell your house for less than what you paid for it, you incur a capital loss on the property.
- If you trade in a baseball card that you bought for $50 and can only sell it for $30, you have a capital loss of $20.
Capital Loss Hypernyms
Words that are more generic than the original word.