Last: 
Definition of Capital Gain and Capital Loss
Capital gain is the capital gain obtained by an investor from the sale of assets they own such as stocks, bonds, and property. How can you get these benefits? You can get this profit because there is a difference in the selling price minus the purchase price of the shares. In other words, capital gains are the difference between the selling price and the buying price of an asset.You can say that you have earned capital gains when you have sold the assets or investment instruments you own. When you own an asset and only plan to sell it at a high price, you can say that you haven't acquired it yet. An example of capital gain is when you buy a stock at a price of IDR 2 million and you manage to sell it at a price of IDR 6 million. So, you have received a capital gain of IDR 4 million. In other words, this capital gain is what many investors expect. Of course, all investors certainly want as much profit as possible.
The term stock capital gain may be more familiar to beginner investment players. In fact, capital gains also apply to other investment instruments such as property, mutual funds, jewelry, and also gold. There is capital gain, there is also the term capital loss. What is capital loss? Capital loss is a situation in which shareholders suffer losses because their investment assets are reduced in value.
It could be that you are selling an asset at a lower sell price than the purchase price. Facing capital losses is also a natural thing for investors. Being a trader is certainly not only dealing with capital gains. There are times when they also have to suffer losses or capital losses. Capital loss is a loss that occurs when an investor has to sell the assets he owns at a lower selling price than the purchase price. Since capital gains and losses are two interrelated things, it's a good idea to know the type of capital gains to choose the right investment.
Types Based on Investment
To be able to make the right investment choice, of course, the source of profit is also one of the considerations. With a choice of profit types, you can really determine the investment instrument that is suitable for you. There are two types of capital gains or capital gains that are grouped based on the duration or period of the investment itself and also the taxes it bears.Short-Term Capital Gains
In accordance with the term, capital gains or short-term capital gains will be obtained by an investor in less than 1 year or 12 months. Examples of investment assets to get short-term profits are mutual funds and stocks. In addition, various assets that have an ownership period of less than a year will be directly classified as short-term capital assets.However, not all investment instruments have the same timeframe to be able to get short-term capital gains. For example, the various property assets you own have a period of 2 years or 24 months. So, when you sell a property asset for less than 2 years then you will only get a short-term capital gain. What about the dependent taxes that must be paid for this type of investment? Actually, the value of tax imposed on short-term capital gains will be adjusted to the value of income tax. In other words, there is no fixed amount of tax for short-term capital gains.
Long-Term Capital Gains
In contrast to capital gains or short-term capital gains, you will be able to get long-term capital gains within more than 36 months. There is also a storage period for various non-transferable property assets changed to 24 months or 2 years. As for movable assets such as debt securities or jewelry, long-term capital gains do not apply. In full, here are some examples of assets that are classified as long-term capital assets.- Equity shares originating from any organization that has been registered and recognized by the Stock Exchange
- Securities such as bonds and also debt securities that have been listed on any stock exchange
- Capital gains in equity-oriented mutual funds
- Bond
Facts
In studying capital gains more thoroughly, there are some important facts on this topic that you should not miss. These facts will go a long way in understanding this topic in depth. Check out the facts below.Time is Key
Investment can be likened to a romantic relationship. Romantic relationships take time to get to know each other. The longer you get to know your partner, the higher your love will be over time. Similarly, investment also prioritizes time. The longer you maintain your assets, the higher the potential for price increases over time. In addition, when buying and selling assets in a short time, you need to consider administrative fees. Sometimes a lot of administrative fees are quite high charged to traders. With this high cost, of course, it will have the potential to reduce capital gains. So, this is also a consideration when you want to buy and sell assets.Indonesians' Capital Gains Come from the Housing Sector
Owning a dream house may be the dream of everyone, including Indonesians. The Indonesian government is currently aggressively promoting a housing program at a much more affordable price. No wonder there are so many houses built. As time goes by, house prices continue to increase from year to year. In other words, capital gains from the housing sector will continue to skyrocket in the next few decades. It feels impossible for stocks and other investment instruments to shift their positions.Capital Gain is Different from Income
Capital gains are often misinterpreted with the term income. Income is the result of profits obtained through a business or activity carried out. For example, you buy a used t-shirt for IDR 60 thousand. Because it still looks good, you sell it for Rp110 thousand the next day and it sells. This can be referred to as income. On the other hand, capital gains can be obtained when you sell assets over a period of more than 1 year. If you have an investment product such as stocks or mutual funds, you can sell it and make a capital gain after a certain period of time.Difference Between Dividends and Capital Gains
Capital gains and dividends often make many people confused in their interpretation. Although both provide profits, there is a difference between dividends and capital gains. The two have significant differences. Here are the differences.Source of Procurement
Judging from the source of income, capital gains are different from dividends. Dividend earnings come from profits generated by business entities in one accounting period or one year period. However, not all profits are dividends. Only a part of it became dividends. Dividends are indeed a right for investors, but the distribution is not absolute. Dividend distribution can be carried out or not based on company policy. Companies or business entities may not distribute dividends to their investors because there are losses incurred by the company, or are expanding their business.Capital gains are obtained from the excess difference between the price of buying and selling shares. Stock prices are always moving, can go up and down. Selling stocks when the price rises results in profits or capital gains. So, capital gains have nothing to do with the profit of a business entity. Therefore, the amount of capital gains is not affected by the size of the profit earned by the business entity during the financial year. Capital gains come from the action of investors selling their shares in the capital market when the stock price is rising.
Acquisition Time
In general, dividend distribution takes place once a year. The amount of dividends is determined at the General Meeting of Shareholders (GMS). However, there is a possibility of a policy of distributing interim dividends, namely temporary returns that are distributed to investors periodically during the current year, for example quarterly. The distribution of this interim dividend is determined based on the decision of the Board of Directors. Unlike capital gains, the time of acquisition is not tied to company policies or the results of the GMS. Capital gains can be obtained at any time when investors sell their shares when the price increases. In this regard, investors can sell some or all of their shares when the stock price surge results in a large difference.Nature of Income
Based on the time of its acquisition, the nature of dividend income is passive, while capital gains tend to be active. Dividends are called passive income, because investors do not do much trading and only wait for the distribution of final and interim annual dividends. To get passive income dividends, investors must have large financial capital to buy company shares and keep them in the long term. The acquisition of capital gains requires investors to be active in trading activities in the capital market. The nature of capital gains income is active. To get great profits from capital gains, investors must be active and expert in technical analysis. In general, investors who pursue capital gains have relatively small financial capital.The Right Time to Transaction
Stock trading activities determine the acquisition of dividends and capital gains. Investors must be able to read the market situation and analyze stock movements intensively. The goal is to be able to take advantage of the momentum and determine the right time to decide to buy or sell stocks. In order to maximize profits, investors must pay attention to the following points. Dividend yield is the rate of return on shares offered by a business entity in percentage units.The rate of return on shares of a business entity is determined based on the amount of dividends per share compared to the share price per share. The larger the dividend yield, the greater the dividend distributed by the company. The ex-date dividend date is the period after the date. When investors who are listed have shares of a business entity at the ex date deadline, they are not entitled to receive dividends. Investors who buy shares of a business entity on the ex date will not be included in the list of investors who are entitled to receive dividends. So, don't make a mistake in choosing the time to buy shares.
Dividend date is the deadline for determining which investors are entitled to receive dividends. Investors who are listed as owning the company's shares until the date deadline are entitled to receive dividends. So, the right time to buy shares to get dividends is before the date expires. Meanwhile, the right time to sell stocks to get capital gains is when the ex date period comes.
Capital Gain Formula
Before selling the assets you own, it's a good idea to know how to calculate capital gains. Here is a capital gains formula that you can try before selling your assets. Capital gain = selling price – buying price – selling costExamples of Capital Gain
To make it easier to understand, you can see the following example of calculation. Dandy bought a property in 2015 for IDR 900 million. 6 years later, Dandy plans to sell his property for IDR 2 billion. There are also additional costs that Dandy must incur for the purpose of managing papers, notary fees, and also agent fees of IDR 100 million. So how much capital gain did Dandy get by selling his property?- Selling price = IDR 2 billion
- Purchase price = IDR 900 million
- Selling cost = IDR 100 million
- Capital gain = IDR 2 billion – IDR 900 million – IDR 100 million = IDR 1 billion
Example of Capital Gain Stock Questions
Mr. Z buys shares with a quantity of 1 lot (500 shares per lot) at a price of IDR1,000 per share. 6 months later, Mr. Z sold his shares as many as 1 lot at IDR 2,000 per share. So, Mr. Z's Capital Gain is as follows: Share Purchase Price: 500 shares x IDR1,000 = IDR500,000 Share Selling Price: 500 shares x IDR2,000 = IDR1,000,000 Capital Gain = IDR 500,000Example of Capital Loss Questions for Stocks
Mrs. N bought 1 lot of shares (500 shares per lot) at a price of IDR2,000 per share. In the next 6 months, Mrs. N sold her shares as many as 1 lot at IDR 1,000 per share. So, Mrs. N's Capital Loss is as follows: Share Purchase Price: 500 shares x IDR2,000 = IDR1,000,000 Share Selling Price: 500 shares x IDR1,000 = IDR500,000 Capital Loss = IDR 500,000Taxes on Capital Gains
In investing, an investor certainly wants as much capital profit as possible from what is invested. This applies to stocks, property, mutual funds, businesses, and so on. However, each investment instrument always goes hand in hand with different tax rates. The same applies to companies whose steps are never separated from the tax collection system. So, whenever a person gains a profit from selling an asset, he will get the status of a tax liability. The value of the tax burden that must be paid is mandatory and absolute.However, the value or tax rate will differ depending on the income tax or income tax owned, the period of asset ownership, and the type of capital assets owned. For capital gains tax, this can be in the form of collectibility for long-term and short-term taxes, bonds, and property. Later, both companies and individuals need a detailed and thorough financial reporting and recording system. If you have successfully sold your assets, you must attach a personal annual tax return that is considered an additional income. So you also have to pay taxes on the proceeds from the sale of the assets you receive.
Conclusion
Overall, if you decide to venture into the world of investment, capital gains and capital losses are two things that often happen. To be able to get much more profit, you have to consider the type of capital gain you want to choose. In addition, you can also recalculate by looking at the formula for calculating capital gains to find out how much profit you can get by selling assets. There are also several facts that often make it difficult for many people to distinguish between dividends, capital gains, and income.Although they both provide profits that can be used as capital, they are all three different things. In getting tax benefits, it is always followed by the tax charged to the owner of the asset that sells it. However, this tax is charged only when a person or other investor sells his assets. By reading the full article above, it is hoped that you can get a detailed overview of capital gains and what to consider before deciding to enter this world. In addition to the discussion of capital gains and capital losses above, you can also read other articles such as how to learn forex in the GIC Journal. Also participate in GIC events such as Friday barokah and 100% Deposit Bonus.
