capital loss: meaning, definition, pronunciation and examples
High in financial contexts, low in general contexts.Formal, technical, financial.
Quick answer
What does “capital loss” mean?
A decrease in the value of an investment or capital asset.
Audio
Pronunciation
Definition
Meaning and Definition
A decrease in the value of an investment or capital asset.
A financial loss realized when an asset is sold for a price lower than its original purchase price; can be used to offset capital gains for tax purposes.
Dialectal Variation
British vs American Usage
Differences
None. It is an identical, standard term in all major financial and legal contexts across both regions.
Connotations
Neutral financial/accounting term in both.
Frequency
Identical and very high frequency in financial reporting and investment discussions.
Grammar
How to Use “capital loss” in a Sentence
[investor/company] realized a capital loss on [asset]The capital loss was used to offset the gains.A capital loss of [amount] was reported.Vocabulary
Collocations
Examples
Examples of “capital loss” in a Sentence
verb
British English
- The investor is looking to crystallise a capital loss before the tax year ends.
- They decided to realise the capital loss on the underperforming shares.
American English
- The investor is looking to realize a capital loss before the tax year ends.
- They decided to take the capital loss on the depreciated property.
adverb
British English
- [Not standard. The term does not have a standard adverbial form.]
American English
- [Not standard. The term does not have a standard adverbial form.]
adjective
British English
- The capital-loss position was carried forward to the next year.
- They submitted a capital-loss declaration to HMRC.
American English
- The capital-loss position was carried forward to the next year.
- They filed a capital-loss deduction with the IRS.
Usage
Meaning in Context
Business
Common in financial reports, investor briefings, and tax strategy meetings.
Academic
Used in economics, finance, and accounting textbooks and papers.
Everyday
Rare, used mainly by individual investors discussing their portfolios.
Technical
Precise term in tax law, accounting standards (GAAP/IFRS), and portfolio management.
Vocabulary
Synonyms of “capital loss”
Strong
Neutral
Weak
Vocabulary
Antonyms of “capital loss”
Watch out
Common Mistakes When Using “capital loss”
- Using 'capital loss' to describe a business's operating loss (e.g., from daily expenses).
- Confusing 'capital loss' with 'capital expenditure' (CapEx).
- Misspelling as 'capitol loss' (referring to a building).
FAQ
Frequently Asked Questions
A capital loss comes from selling a capital asset (like stocks or property) for a loss. An ordinary loss typically comes from normal business operations or the sale of non-capital assets (like inventory). They have different tax treatments.
No. A capital loss is 'realized' only when the asset is actually sold or deemed disposed of. A decrease in value while you still own it is an 'unrealized' or 'paper' loss.
Rules vary by country. Often, capital losses can be used to offset capital gains dollar-for-dollar. If losses exceed gains, there may be a limited amount (e.g., $3,000 in the US) that can be deducted against ordinary income each year, with the remainder carried forward.
Not exactly. Depreciation is the accounting allocation of an asset's cost over its useful life. A capital loss is the actual financial loss incurred upon the sale of the asset, which may be more or less than the total accumulated depreciation.
A decrease in the value of an investment or capital asset.
Capital loss is usually formal, technical, financial. in register.
Capital loss: in British English it is pronounced /ˈkæp.ɪ.təl lɒs/, and in American English it is pronounced /ˈkæp.ə.t̬əl lɔːs/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “[not applicable for this technical term]”
Learning
Memory Aids
Mnemonic
Think 'CAPITAL' (money invested) + 'LOSS' (it went down). You lose capital when you sell for less than you paid.
Conceptual Metaphor
FINANCIAL PERFORMANCE IS A JOURNEY (hitting a loss point). WEALTH IS A CONTAINER (the container loses some of its contents).
Practice
Quiz
In which scenario is the term 'capital loss' most accurately used?