In an ordinary investment account, capital investments are subject to capital-gains tax treatment. Short-term capital gains are taxed as ordinary income and long-term capital gains are taxed at a lower rate than ordinary income. Capital gains and losses are the difference between the cost basis and the sales proceeds. Cost basis is tracked either as an average cost basis or per purchase lot depending on your chosen cost basis method.
Certain investments generate dividends and capital gains that are subject to capital gains treatment even if you don't take them out of the account.
