Definition: Capital loss is the loss incurred when a capital asset (for example an investment or real estate) decreases in value. This loss is not realized until the asset is sold for a price that is lower than the original purchase price.
For example, a person who purchased a house for $200,000 and later sold the home for $180,000 would realize a $20,000 capital loss.
Capital Loss
From Jeremy Vohwinkle, former About.com Guide
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