What defines a taxable event for capital gains?

A taxable event for capital gains is specifically defined as the sale of an asset that has appreciated in value. This means that when an individual sells an asset—such as stocks, real estate, or other investments—at a price higher than its purchase price, the profit realized from that sale constitutes a capital gain, which is subject to taxation.

This distinction is crucial in understanding capital gains taxation. It's not merely the increase in the value of the asset that triggers tax liability; it is the actual transaction of selling the asset that counts as a taxable event. Holding an asset, regardless of the duration, does not by itself create a taxable event; it is only when you realize that gain through a sale that the tax implications come into play. Similarly, simply acquiring an asset does not constitute a taxable event as there is no gain to report until the asset is sold.