a return of capital

USAGE SUMMARY

The phrase "a return of capital" is correct and usable in written English.
It can be used in financial contexts to refer to the repayment of an investment to the investor, typically in the form of cash or assets. Example: "Investors were pleased to see a return of capital after the successful liquidation of the fund."

✓ Grammatically correct

News & Media

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

44 human-written examples

DIVIDENDS -- Some fund payments are a return of capital.

The New York Times

In our view, a return of capital is unlikely in 2016.

The Guardian - Business

[So] we believe a return of capital is unlikely in the next year although the dividend payout ratio could increase.

The Guardian - Business

Edgar Ancona, the company's treasurer, told me that the buybacks should be viewed as "a return of capital to some shareholders".

The New York Times

"He purchased IndyMac Bank for $1.6bn and ran it very professionally, selling it for $3.4bn plus a return of capital," Trump said.

The Guardian

That may sound like a decent amount, but the money used to finance an annuity is forfeited to the insurer, so much of the 7.1 percent amounts to a return of capital.

The New York Times

Human-verified similar examples from authoritative sources

Similar Expressions

16 human-written examples

Financial commentators like to explain away the willingness of investors to accept record-low interest rates by saying that they are seeking a return of their capital rather than a return on their capital.

The New York Times

On his personal tax return he reports not a taxable capital gain, the way he would have in an ordinary sale of his business, but instead a return of his capital from the S corporation, which is not taxable.

The New York Times

Investors expect at least a return of their capital with an adjustment for inflation and, in many cases, a lot more than that.

The New York Times

Mr. Schneiderman is also looking at whether private equity executives treated management fees as a return of invested capital — potentially escaping taxation entirely — or deferred payouts of the converted fees in ways that improperly reduced their tax liabilities.

The New York Times

Our approach is based on a sustainable business model, delivering four returns), Living Lands is now combining its bottom-based approach with a top-guided approach that uses Commonland's Four Returns concept (Commonland's four returns approach and business model aim to secure a return of inspiration, social capital, natural capital, and financial capital (investment)).

Land Restoration Reclaiming Landscapes for a Sustainable Future

Expert writing Tips

Best practice

When discussing distributions from investments, clarify whether it's a return of capital or a dividend, as they have different tax implications.

Common error

Don't assume that a "return of capital" is always taxable income. It often represents the recovery of your initial investment and may reduce your cost basis, affecting capital gains when the asset is sold.

Linguistic Context

The phrase "a return of capital" functions as a noun phrase, typically acting as the subject or object of a sentence. As shown in Ludwig, it often refers to the repayment of an investment or a portion thereof.

Expression frequency: Very common

Frequent in

News & Media

63%

Formal & Business

25%

Wiki

2%

Less common in

Science

8%

Encyclopedias

0%

Reference

0%

Ludwig's WRAP-UP

In summary, the phrase "a return of capital" is a noun phrase commonly used in finance and investment to describe the repayment of an investment to the investor. Ludwig AI identifies it as grammatically correct and frequently used in contexts such as news and business. It's important to distinguish it from taxable income like dividends, as it typically represents the recovery of the original investment. Alternatives include "capital reimbursement" or "repayment of principal". Be careful not to misinterpret it as profit, as it primarily reduces the cost basis of the investment for tax purposes. The phrase is most often found in sources like Forbes and The New York Times.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

Capital reimbursement

Focuses on the act of repaying the capital amount.

Reimbursement of capital

Emphasizes the action of reimbursing the initial investment.

Capital payback

Highlights the act of paying back the capital.

Repayment of principal

Specifically refers to returning the original amount invested.

Liquidation payout

Describes a payment received from the liquidation of assets.

Distribution of capital

Focuses on the distribution aspect rather than the return.

Capital distribution

Emphasizes the distribution of the capital amount.

Return of investment

Broader term encompassing profits and the original capital.

Investment recovery

Focuses on the recovery of the investment.

Capital repatriation

Refers to returning capital to its country of origin.

FAQs

How is "a return of capital" treated for tax purposes?

Generally, "a return of capital" reduces your cost basis in the investment. It's not taxed until you sell the investment, and even then, it may be taxed at a lower rate than ordinary income.

What's the difference between "a return of capital" and a dividend?

A dividend is a distribution of a company's earnings, while "a return of capital" is a payment that represents a portion of your original investment being returned to you. Dividends are typically taxable as income, whereas "a return of capital" is not until the asset is sold.

When might I receive "a return of capital"?

You might receive "a return of capital" from investments like Real Estate Investment Trusts (REITs) or Master Limited Partnerships (MLPs), where depreciation or other factors allow the entity to return a portion of your investment without it being immediately taxed as income.

What are some alternatives to "a return of capital" in financial reporting?

In financial reporting, you might use terms like "capital reimbursement" or "repayment of principal" to describe the same concept, depending on the specific context.