A realized gain is when an investment is sold for a higher price than it was purchased. Realized gains are often subject to capital gains tax. Depending on the holding period, it will be considered either a short-term or long-term gain.

What is the difference between realized gain and unrealized gain?

An unrealized gain is an increase in the value of an asset or investment that an investor holds but has not yet sold for cash, such as an open stock position. ... A gain or loss becomes realized when the investment is actually sold.

How do you calculate realized gain?

To calculate a realized gain or loss, take the difference of the total consideration given and subtract the cost basis. If the difference is positive, it is a realized gain.