return of capital

USAGE SUMMARY

The phrase "return of capital" is correct and usable in written English.
It is typically used in financial contexts to refer to the process of returning an investor's original investment amount. Example: "Investors were pleased to see a return of capital in the latest financial report, indicating the company's strong performance."

✓ Grammatically correct

News & Media

Formal & Business

Science

Human-verified examples from authoritative sources

Exact Expressions

58 human-written examples

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

The New York Times

She has also previously endorsed the return of capital punishment.

The Guardian

This is about return of capital, not return on capital.

The Guardian - Business

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

The Guardian - Business

$24.75 RETURN OF CAPITAL TO PRODUCERS What it's all about on Broadway: making money.

The New York Times - Arts

From a Times article calling for the return of capital punishment.

The Guardian

"We are determined to fully exploring every avenue and we are committed to pursuing return of capital alternatives".

The New York Times

Nish was coy on what the group would do with the remaining proceeds after the £1.75bn return of capital.

The Guardian - Business

Later Allied took back its money, but it appeared on its books as an untaxable return of capital.

The New York Times

Human-verified similar examples from authoritative sources

Similar Expressions

2 human-written examples

In some cases, the funds distribute dividends in the form of capital gains or return-of-capital distributions.

The New York Times

Figure in the return-of-capital deduction, and they're getting $6,278 aftertax.

Forbes

Expert writing Tips

Best practice

When discussing financial performance, clarify whether you're referring to "return of capital" or "return on capital" to avoid confusion.

Common error

Don't assume "return of capital" signifies a profit. It represents the return of the initial investment, not necessarily a gain.

Linguistic Context

The phrase "return of capital" functions as a noun phrase, typically used as a subject or object in sentences discussing financial matters. Ludwig AI confirms that this phrase is commonly used in financial contexts to describe the process of returning an investor's original investment.

Expression frequency: Very common

Frequent in

News & Media

45%

Formal & Business

35%

Science

20%

Less common in

Encyclopedias

0%

Wiki

0%

Reference

0%

Ludwig's WRAP-UP

The phrase "return of capital" is a very common and grammatically sound term primarily used in finance to indicate the reimbursement of an investor's original investment. As Ludwig AI points out, it is not the same as "return on capital", which refers to profits earned on an investment. The sources analyzed indicate a professional and neutral register for the phrase. It’s crucial to understand that a "return of capital" isn't necessarily a sign of profit, but simply the return of the money initially put in. Therefore, clarifying the difference between "return of capital" and "return on capital" is critical in financial discussions. Tax implications are also important, as returns of capital typically reduce the cost basis of an investment.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

capital repayment

Focuses on the act of repaying the original investment amount.

capital refund

Emphasis is on the refunding aspect of the return.

repatriation of capital

Specifically refers to returning capital to its country of origin.

capital reimbursement

Emphasizes the act of being reimbursed for the capital invested.

refund of capital

Implies a return of capital due to cancellation or termination of an investment.

recovery of capital

Highlights the process of regaining the original investment, especially after a loss.

capital redemption

Refers to the repurchase of shares or bonds by the issuing company, returning capital to investors.

capital distribution

Broader term referring to any distribution of capital to investors, including returns of capital.

capital payout

Focuses on the disbursement of capital to investors.

liquidation proceeds

Refers to the money received from selling assets during liquidation, which can include a return of capital.

FAQs

What is the difference between "return of capital" and "return on capital"?

"Return of capital" refers to the repayment of the original investment amount, while "return on capital" indicates the profit or gain earned on that investment.

How is "return of capital" taxed?

A "return of capital" is generally not taxed when received but reduces the investor's cost basis in the investment. This may affect capital gains taxes when the investment is eventually sold.

In what scenarios might I receive a "return of capital"?

You might receive a "return of capital" from mutual funds, real estate investment trusts (REITs), or as part of a corporate action like a special dividend or liquidation.

What does it mean when a dividend is classified as a "return of capital"?

When a portion of a dividend is classified as a "return of capital", it means the company is returning a portion of the investor's original investment rather than distributing profits. This portion of the dividend is generally not taxed as income but reduces the investor's cost basis.