Question

When do you actually have a capital gain?

a
When you buy a stock
b
When the stock goes up in value
c
When you sell the stock for more than you bought it for
d
When a dividend is issued

Answer 1

c — When you sell the stock for more than you bought it for.

Explanation: A rise in price while you still hold the stock is an unrealized (paper) gain. You only realize a capital gain when you sell the asset for more than your purchase price. Dividends are income, not capital gains.