The percentage of gain or loss on an investment is generally the difference between how much you paid for the investment and how much money was involved in its sale. You have a gain if the amount received when you sell or trade the investment is more than the adjusted basis of your investment. You have a loss on an investment if the adjusted basis is more than the amount realized when you transfer the property.

The amount you realize from the sale or trade of an investment is everything received for it, including all money and the fair market value (FMV) of any property or services. The FMV is the price for which the property or services would normally be sold.

A debt against you or the investment that is satisfied as part of the transaction or is assumed by the buyer is included in your realized amount, even if neither you nor the buyer is personally liable for the debt. If trading cash and property for another property the amount you realize is the FMV of the property received. The gain or loss is the money and the adjusted basis of the property you relinquish subtracted from the amount you realize.

Your adjusted basis depends on the type of investment. The basis of stocks, bonds, mutual funds, or a real investment trust is generally your purchase price plus purchase costs, such as commissions and transfer or recording fees. If you acquired your investment by means other than purchasing it, your adjusted basis is either the FMV or the previous owner’s adjusted basis.

Learn more about calculating gain or loss on an investment in the 2008 U.S. Internal Revenue Service (IRS) article “Investment Income and Investments, IRS Publication 550.