Net Proceeds

The amount received by the seller after all costs and expenses are deducted from the gross proceeds arising from the sale of an asset. Depending on the asset sold, such costs may either account for a marginal percentage of the gross proceeds, or a substantial percentage of it. Capital gains taxes are generally paid only on the net proceeds of a sale, rather than the gross proceeds.

For example, in the case of a security sale, net proceeds represent proceeds from the sale minus trading costs, such as commissions. Assuming that the security seller routes the order through a discount broker for a commission of $10, the sale of 100 shares of a stock trading at $25 would result in gross proceeds of $2,500, and net proceeds of $2,490; the difference between the two is only 0.4%.

However, in the case of a real-estate sale, the difference between gross proceeds and net proceeds is likely to be significantly higher - a percentage figure in the low to mid single digits - since the seller has to pay for realtor commissions, legal fees and other closing costs.


Investment dictionary. . 2012.

Look at other dictionaries:

  • net proceeds — USA With respect to an offering, an amount equal to the gross proceeds of the offering less the underwriting discounts and commissions and offering expenses. Practical Law Dictionary. Glossary of UK, US and international legal terms.… …   Law dictionary

  • net proceeds — Amount received from the sale of an asset after deducting all transaction costs. Bloomberg Financial Dictionary * * * net proceeds net proceeds ➔ proceeds * * * net proceeds UK US noun [plural] ► FINANCE, COMMERCE the profit from selling goods or …   Financial and business terms

  • net proceeds — Gross proceeds, less charges which may be rightly deducted. Pflueger v. United States, 73 App. D.C. 364, 121 F.2d 732, 736 …   Black's law dictionary

  • Net proceeds —   An ISO term. The value date, where applicable, currency code, and total amount credited/debited as derived from the settlement amount, plus or minus all charges. [6n]3a15d …   International financial encyclopaedia

  • net proceeds — Fin the amount realized from a transaction minus the cost of making it …   The ultimate business dictionary

  • net proceeds of sale — The proceeds of a sale less charges which may rightfully be deducted by the custodian or agent making the sale. Becker Steel Co. v Cummings, 296 US 74, 80 L Ed 54, 56 S Ct 15 …   Ballentine's law dictionary

  • Sum of net proceeds —   An ISO term. The total amount of the net proceeds of the underlying transactions. 17d …   International financial encyclopaedia

  • net — adj [Anglo French, clean, pure, from Latin nitidus bright, neat, from nitēre to shine]: remaining after deduction of all charges, outlay, or loss the net proceeds compare gross Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • proceeds — Money or property received when collateral is sold, exchanged, or collected. American Banker Glossary money received by the seller of an asset. Bloomberg Financial Dictionary * * * proceeds pro‧ceeds [ˈprəʊsiːdz ǁ ˈproʊ ] noun [plural] 1. FINANCE …   Financial and business terms

  • proceeds — n. profit 1) net proceeds 2) proceeds from (proceeds from the sale of surplus property) * * * [ prəʊsiːdz] [ profit ] net proceeds proceeds from (proceeds from the sale of surplus property) …   Combinatory dictionary

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