Purchase Price In Finance: Effect on Capital Gains

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Definition of 'Purchase Price In Finance: Effect on Capital Gains'

The purchase price of an asset is the amount of money paid to acquire it. The purchase price is used to calculate the capital gain or loss when the asset is sold. The capital gain is the difference between the sale price and the purchase price. If the sale price is greater than the purchase price, the capital gain is positive. If the sale price is less than the purchase price, the capital gain is negative.

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