Realized gainrealized P&L
Definition
A realized gain is the result on units you have sold: sale proceeds minus their purchase cost. It is the realized result, not the paper gain, that is taxed.
A realized gain (or realized loss) is the result on units you have already sold. While you hold shares, their gain is unrealized and moves with the market. The moment you sell, the result is “locked in”.
Which shares did you sell? FIFO
If you bought the same shares at different prices, you need to decide which units the sale relates to. The FIFO method assumes the oldest are sold first. Example: you buy 5 shares at 100, then 5 at 120, and sell 6 at 150. The realized gain is 5 × (150 − 100) + 1 × (150 − 120) = 280, and the remaining 4 shares keep a cost of 120.
What else affects the realized result
- Commissions on buying and selling the units sold.
- Dividends and other income attributed to the position.
- Taxes withheld, e.g. withholding tax on dividends.
- For futures: daily settlements, which are realized even though the position stays open.
In Poland, the realized gain is the basis for the capital gains tax return (PIT-38). Note that selling does not improve the portfolio’s result: it only changes the split between realized and unrealized gains.
Closed positions in FundStat
The Closed positions view shows each position’s realized result from opening to its last trade, and the preliminary PIT-38 estimate uses the same FIFO lots.
Related terms
All terms- Unrealized gainAn unrealized gain is the profit or loss on assets you still hold: current market value minus purchase cost. It moves with the market until you sell.
- P&LP&L (profit and loss) is the result of your investments: the gain or loss in money. It splits into realized (after selling) and unrealized (on open positions).
- FIFO methodThe FIFO (first in, first out) method assumes that when you sell shares, the ones bought earliest are sold first. Poland requires it for the PIT-38 tax return.
- Cost basisCost basis is what you paid for the shares you hold, including commissions. Both your paper gain and your taxable gain are calculated from it.