Fundraising
Capital gain
A capital gain is the profit realised when an asset is sold for more than its basis. In the United States, gains on assets held longer than one year are generally taxed at lower long-term rates than ordinary income, subject to the taxpayer's circumstances.
In plain terms: Profit from selling something for more than you paid.
Why it matters
The reason share sale structures matter at exit: a stock sale is more likely to produce capital gain treatment for a seller, while an asset sale can generate ordinary income components taxed at higher rates.
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