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Is there a word or phrase that refers to the portion of the net sale proceeds that aren't capital gain? I know that portion is equal to the asset's cost basis (gain = proceeds - cost basis), but I don't think it actually is cost basis. If I understand the terms, the cost basis is the money I spent to acquire the asset, or maybe just an abstract, intangible amount equal to that. I want to refer to the actual money I received when selling it (the non-gain subset of it).

Imagine I buy an asset for $100 and sell it for $300. For simplicity, there are no commissions or fees. I want to be able to say "I received $300 of net proceeds. Of that $300, $200 was capital gains and $100 was __________."

While researching this question, I found some mentions of "return of capital", which sounds promising. However, those mentions were all talking about distributions from the security's issuer, so I'm not sure whether it can be used for proceeds from a sale to a third party.

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The terms to complete your sentence would be Cost Base, or Book Value if you look at it from the accounting view.
There is no other term in general use.

  • Book value is not guaranteed to be the cost basis for securities if they are AFS or HFT/FVTPL. – ApplePie Aug 24 '17 at 12:28
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Before I read your last paragraph, I was thinking that the term "return of capital" was the term I'd heard of that seemed like what you were looking for. It's not even really some specialized jargon; it's just describing that part of the capital you invested got returned.

From the first result I saw when a did a web search for "return of capital", a site named "Investopedia":

Return of capital is a payment received from an investment that is not considered a taxable event and is not taxed as income. Instead, return of capital occurs when an investor receives a portion of his original investment, and these payments are not considered income or capital gains from the investment.

That sounds to me to be the term you're looking for, and likely to be reasonably understood by whomever you're talking to.

  • I agree that the literal interpretation of "return of capital" is what I want, but I think it would be misleading to use it that way without precedent. I've only seen "return of capital" used is for a payment from the issuer like a dividend or capital gains distribution, but which is classified differently for tax purposes. The Investopedia quote "a payment received from an investment" seems to agree, though it could just be poorly worded. Since I haven't seen any precedent for ", I'm inclined to believe the other answer, that there's no (generally used) term. – George Compton Jul 17 '17 at 14:23
  • Oops, hit the enter key at the wrong time. ..."Since I haven't seen any precedent for "return of capital" used with my desired meaning, I'm inclined... – George Compton Jul 17 '17 at 14:30
  • Return of capital sounds more like what would happen in a share buy-back – ApplePie Aug 24 '17 at 12:33
  • After reading the description from the Investopedia link you provided this is clearly not what OP meant. – ApplePie Aug 24 '17 at 12:34

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