Capital gain is best described as the increase in the value of a capital asset (investment or real estate) as a result of the constantly fluctuating economy. Usually, this asset is not one that is a regular source of income. This is usually the case with rental properties.

There is capital gain when the current selling price of the property is greater than the purchase price. When this occurs, the investor gains financially, although the gain is not realized until the property is sold. Now, to determine the true value of the property, an appraiser is hired to determine the current market value. This value can be used in the future for taxation purposes, asset evaluation, or property sale.