how do you calculate stock gains — step-by-step

Introduction

If you search for how do you calculate stock gains, you want a clear, practical method to measure profit or loss on an investment. This guide explains dollar and percentage gains, realized vs. unrealized outcomes, total return (price change plus dividends minus fees and taxes), the role of cost basis and holding period for tax treatment, and step-by-step examples you can use right away. As of 2026-01-23, according to Investopedia and H&R Block, understanding correct cost basis and holding-period rules remains essential for accurate reporting and tax compliance in the U.S.

How do you calculate stock gains — quick summary

This article gives detailed definitions, core formulas, worked examples, tax considerations (short-term vs. long-term), cost-basis methods (FIFO, specific identification, average cost), how to include dividends and fees, implications of corporate actions, cryptocurrency-specific notes, tools and spreadsheet templates, recordkeeping tips, common pitfalls, and a short FAQ.

Key definitions

• Cost basis: the original amount you paid to acquire shares, including commissions and fees that are capitalized into basis.
• Proceeds: the gross cash you receive from selling shares before fees and taxes.
• Realized gain (or loss): the profit (or loss) recognized when you sell or otherwise dispose of an asset (proceeds − cost basis).
• Unrealized gain (or loss): the change in market value of holdings that you still own (market value − cost basis) — not taxed until realized.
• Total return: return including price change and income (dividends, interest, staking rewards) after costs and taxes.
• ROI (return on investment): usually percentage gain = (gain / cost basis) × 100.
• Holding period: the time between purchase and sale; it determines whether gains are short-term or long-term for tax purposes.
• Dividends and distributions: cash or stock paid to shareholders; can affect total return and cost basis if reinvested.
• Commissions, fees, margin interest: transaction costs that reduce net gains and may adjust basis.
• Capital gains tax: tax on realized gains, with rates typically differing by short-term vs. long-term holding periods in the U.S.

Basic formulas

Keep these core formulas handy. They work for single-buy, single-sell trades and form the building blocks for more complex cases:

• Dollar gain (single trade) = Selling price − Purchase price (per share) × Number of shares − Net fees
• Percentage gain (simple) = ((Selling price − Purchase price) / Purchase price) × 100
• Total dollar profit = (Sale proceeds − Total cost basis) − Fees − Taxes (if calculating after-tax)
• Total return (percentage) = ((Sale price − Purchase price + Dividends − Fees − Taxes) / Purchase price) × 100

Notes:

• If you buy multiple shares at the same price, multiply share-level calculations by the number of shares.
• When shares are purchased at different prices, you must determine which lots are being sold to compute realized gain accurately.

Example formula with shares

If you bought 100 shares at $10.00 and sold all at $15.00 with $10 commission total:

• Dollar gain before fees = (15.00 − 10.00) × 100 = $500
• Net gain after commission = $500 − $10 = $490
• Percentage gain (per-share) = (5.00 / 10.00) × 100 = 50%

Simple worked examples

Example 1 — single purchase and sale (no dividends):

• Buy 50 shares at $20.00 per share, commission $5.00 total.
• Sell 50 shares at $30.00 per share, commission $5.00 total.

Calculations:

• Total purchase cost = 50 × $20.00 + $5.00 = $1,005.00
• Total sale proceeds = 50 × $30.00 − $5.00 = $1,495.00
• Dollar gain = $1,495.00 − $1,005.00 = $490.00
• Percentage gain = ($490.00 / $1,005.00) × 100 ≈ 48.76%

Example 2 — include a dividend and reinvestment:

• Buy 100 shares at $10.00 ($1,000 cost), no commission.
• Over the holding period the stock paid $1.00 per share in dividends and you reinvested dividends to buy 10 more shares at $10.00.
• Sell 110 shares at $12.00, commission $10.00.

Calculations:

• Adjusted cost basis = initial $1,000 + reinvested dividend purchases $100 = $1,100
• Sale proceeds = 110 × $12.00 − $10.00 = $1,310
• Dollar gain = $1,310 − $1,100 = $210
• Percentage total return = ($210 / $1,100) × 100 ≈ 19.09%

Cost basis and lot accounting methods

Cost basis determines taxable gain. Common methods include:

• Specific identification: you specify which lot(s) you sold (best for tax control). Requires broker support or clear records.
• FIFO (first-in, first-out): the earliest purchased shares are considered sold first (common default at many brokers).
• Average cost: commonly used for mutual funds and some consolidated statements — averages cost across all shares.
• LIFO (last-in, first-out): rarely used for equities in practice and not allowed in all contexts; verify allowed methods for your account type.

Why it matters:

• Different methods produce different realized gains when you sell partial holdings. Specific identification can allow tax optimization (selling high-cost lots first to reduce gains or low-cost lots to realize gains when desired).
• Brokers usually show a default method on statements but let you change lot identification at order entry if you request specific ID.

Including dividends, distributions and other income

• Cash dividends increase total return but do not change cost basis unless reinvested.
• Reinvested dividends (DRIP) increase your cost basis because the dividend buys additional shares and those purchases have their own basis.
• Return of capital distributions reduce cost basis and can affect future gain calculations.
• For bonds or fixed-income, interest is typically treated as ordinary income rather than added to cost basis.

Example: reinvested dividends affecting basis

• You owned 100 shares bought at $10 (basis $1,000). A $1/share dividend is reinvested into 9.5238 shares at $1.05 average, costing $10 (rounded). New total shares 109.5238. New cost basis = $1,010.

Transaction costs and adjustments

• Commissions, platform fees, exchange fees, and margin interest reduce net gains.
• Include trade commissions and fees in cost basis when purchasing; subtract selling commissions from sale proceeds when selling.
• If you pay for special services (research, advisory) those are generally not added to basis for securities but consult tax rules for your jurisdiction.

Realized vs. unrealized gains

• An unrealized gain exists while you hold the position; no U.S. federal tax until realized (with some exceptions for certain constructive sales or distributions).
• A realized gain occurs when you sell, exchange, or otherwise dispose of the asset.
• Tax consequences differ: realized gains are reported on tax returns and may trigger withholding/reporting by brokers.

Capital gains tax considerations (U.S. focus)

• Holding period classification:
  • Short-term capital gains: assets held one year or less; taxed at ordinary income tax rates.
  • Long-term capital gains: assets held more than one year; taxed at preferential capital gains rates.
• Basis adjustments:
  • Reinvested dividends increase basis; return-of-capital distributions reduce basis.
• Reporting and forms:
  • Brokers issue year-end statements (e.g., 1099-B in the U.S.) that report proceeds and basis information. Reconcile broker forms for accuracy.
• Wash-sale rule:
  • If you sell at a loss and buy substantially identical securities within a 30-day window before or after the sale, the loss may be disallowed and instead added to the basis of the replacement shares. This affects realized-loss harvesting tactics.

As of 2026-01-23, tax guidance from major tax-preparation resources stresses careful lot identification and documentation to avoid reporting errors and to apply holding periods correctly.

Note: This section is informational and not tax advice. Consult a tax professional or relevant tax authority for personal guidance.

Calculating gains across multiple purchases and sales

When you have multiple lots, follow these steps:

1. Identify which lot(s) you are selling (specific ID), or determine default method (FIFO) if you haven't specified.
2. Compute the cost basis for the sold shares (sum of purchase price × shares for the selected lots plus associated purchase fees allocated to those lots).
3. Compute sale proceeds (sale price × shares sold minus selling fees).
4. Realized gain = sale proceeds − cost basis of sold lots.

Spreadsheet approach:

• Keep a lot-level table: purchase date, number of shares, price per share, total cost (including purchase fees), remaining shares.
• When selling, mark which lot(s) are reduced and calculate realized gain for those lot reductions.

Example: selling partial lots (FIFO vs specific ID)

Scenario:

• Lot A: 100 shares bought at $10.00 on Jan 1
• Lot B: 100 shares bought at $15.00 on June 1
• You sell 150 shares at $20.00 on Dec 1, selling costs $10 total

FIFO method:

• Sold Lot A fully (100 shares) and 50 shares from Lot B.
• Cost basis sold = 100×$10 + 50×$15 = $1,000 + $750 = $1,750
• Sale proceeds = 150×$20 − $10 = $2,990
• Realized gain = $2,990 − $1,750 = $1,240

Specific identification (choose higher-cost lots first to minimize gain):

• If you specifically identify selling 150 shares from Lot B (if allowed): cost basis = 150×$15 = $2,250
• Sale proceeds = $2,990
• Realized gain = $740

This example shows how specific ID can materially affect realized taxable gain.

Special corporate events and their effect on calculations

• Stock splits: adjust number of shares and per-share cost basis (total basis unchanged). For example, a 2-for-1 split doubles shares and halves per-share basis.
• Reverse splits: reduce shares and increase per-share basis proportionally.
• Spin-offs: may require allocation of original basis between parent and spun-off securities based on fair-market values at time of distribution.
• Mergers, acquisitions, and tender offers: may be taxable or nontaxable depending on structure; basis allocation may be complex.

Always read corporate action notices and keep records of how your broker adjusted basis. If your broker fails to adjust correctly, you remain responsible for accurate reporting.

Cryptocurrency-specific considerations

If you hold crypto alongside stocks, many principles are similar but with additional points:

• Each disposition (sale, swap, spending crypto for goods/services, exchanging one token for another) can be a taxable event in many jurisdictions.
• Staking rewards, airdrops and similar income are often taxable when received and may create a cost basis for future disposals.
• Lot identification and cost-basis tracking are equally important for crypto. Exchange reporting can be inconsistent, so keep independent records.
• Crypto corporate events (forks, token swaps) often have special tax rules; follow official guidance.

Where appropriate, use Bitget's trading reports and Bitget Wallet records to reconcile transactions and generate basis information for tax reporting.

Tools and calculators

Common tools to help calculate gains and returns include:

• Broker statements and account tax documents (primary source for realized gains and basis summaries).
• Online stock profit calculators and total-return calculators to test scenarios (input purchase date, price, shares, fees, dividends).
• Portfolio trackers that support lot-level accounting and import broker trade history.
• Spreadsheet templates where you control formulas and lot tracking.

When using third-party calculators or tools, verify input data (purchase dates, fees, dividend reinvestments) and ensure they support the cost-basis method you intend to use.

For users of Bitget services, Bitget account history and Bitget Wallet transaction logs are recommended starting points for compiling trade and income data for calculations.

Using spreadsheets and software

A simple spreadsheet layout to track cost basis and gains:

Columns:

• Trade ID
• Date
• Action (Buy/Sell/Dividend/Reinvest)
• Ticker/Token
• Quantity
• Price per share/token
• Fees
• Total cost/proceeds
• Lot ID
• Remaining shares in lot
• Realized gain (for sells)

Useful formulas:

• Total cost = Quantity × Price per unit + Fees
• Sale proceeds = Quantity × Sale price − Fees
• Realized gain = Sale proceeds − Allocated cost basis
• SUMPRODUCT can compute weighted averages quickly for average-cost methods
• XIRR or IRR functions compute time-weighted or cash-flow internal rates of return for irregular cash flows

A practical tip: when you execute a sell in your spreadsheet, create a linked calculation that reduces the remaining shares in the lot(s) used and calculates the realized gain automatically.

Recordkeeping and reporting best practices

• Keep trade confirmations, monthly and year-end broker statements, dividend notices, and records of reinvested distributions.
• Save copies of corporate action notices (splits, spin-offs, mergers).
• Reconcile broker 1099-B (or local equivalent) with your records; brokers may report basis that differs from your records for older lots.
• Store supporting documents for at least as long as required by your tax authority (often several years).
• Use Bitget account download features and Bitget Wallet export tools to centralize transaction histories for reconciliation.

Common mistakes and pitfalls

• Ignoring commissions and fees when computing gains.
• Forgetting to include reinvested dividends in adjusted cost basis.
• Failing to identify which lots were sold, leading to incorrect realized gain.
• Overlooking corporate actions that change share counts or basis.
• Misapplying the wash-sale rule when harvesting losses.
• Depending solely on exchange notices when you also moved assets between platforms or wallets; cross-platform moves can complicate basis tracking.

Avoid these mistakes by keeping clear lot-level records and reconciling broker/tax statements annually.

Advanced topics (brief)

• IRR/XIRR: use for investments with multiple cash flows at irregular intervals to compute annualized return.
• Tax-loss harvesting: selling depreciated positions to realize losses and offset gains; watch wash-sale rules.
• Total-return attribution: decomposes portfolio return into contributions by price change, income, and currency or allocation effects.
• Leverage and margin: magnifies gains and losses and introduces interest costs that affect net returns and risk.

Frequently asked questions (FAQ)

Q: When is a gain realized? A: A gain is realized when you sell or dispose of an asset — meaning it is no longer held by you. Certain corporate actions or exchanges can also trigger realization.

Q: How do reinvested dividends affect basis? A: Reinvested dividends create new purchases; the amounts used to buy additional shares are added to your cost basis.

Q: What is the wash-sale rule? A: If you sell a security at a loss and buy substantially identical securities within 30 days before or after the sale, the loss may be disallowed and instead added to the basis of the new shares. This affects tax-loss harvesting.

Q: How do I report partial sales? A: Determine which lot(s) the shares sold came from (specific ID, FIFO, or another permitted method). Calculate basis for the sold shares, compute proceeds, and report the difference as realized gain or loss.

Q: Are cryptocurrency gains calculated the same as stock gains? A: Fundamental math is the same (proceeds minus basis), but tax rules and taxable events can differ; many crypto transactions are taxable events when tokens are exchanged, spent, or swapped.

References and further reading

Sources consulted for guidance in this article include major investor-education and tax-preparation resources and common broker/tool practices such as Investopedia, SoFi, NerdWallet, MarketBeat, Fidelity calculators, SmartAsset, Portseido, and H&R Block. These resources explain formulas, tax implications, cost-basis methods, and practical calculators. For U.S. taxpayers, refer to official IRS publications and your broker's tax guides.

As of 2026-01-23, these authorities continue to stress accurate lot identification, clear recordkeeping, and awareness of holding-period rules for correct capital gains reporting.

See also

• Portfolio return calculations
• Capital gains tax basics
• Dividend taxation and DRIP accounting
• Cost-basis methods and lot tracking
• Cryptocurrency tax reporting and wallet recordkeeping

Final notes and next steps

Knowing how do you calculate stock gains is essential for measuring performance, managing taxes, and making informed decisions. Start by downloading trade history from your brokerage and Bitget Wallet, build a simple lot-level spreadsheet, and use Bitget account tools to reconcile results. If tax outcomes matter to you, consult a tax professional or the relevant tax authority to apply rules to your situation.

Explore Bitget’s tools and Bitget Wallet to export transaction histories and simplify reconciliation. Ready to put this into practice? Export your account history, set up a lot-tracking sheet, and test both FIFO and specific-identification scenarios to see how different methods affect realized gains.

Important:

Information in this article is educational and does not constitute tax or investment advice. For personalized advice, consult a qualified professional.