If an investor sells an investment property for less than the purchase price after owning it for over a year, what term describes this?

When an investor sells an investment property for less than the purchase price, the financial outcome is classified as a capital loss. A capital loss occurs when an asset, such as real estate, is sold for a price lower than its original purchase price, highlighting a decrease in the property's value during the time of ownership. This term is particularly significant in taxation, as it can offset capital gains from other investments, potentially reducing the investor's overall tax liability.

In contrast, a capital gain is recorded when an asset is sold for more than its purchase price, which is not applicable in this scenario. Terms like market loss or investment decline may intuitively convey a decrease in value but lack the precise tax implications and recognition in financial reporting that capital loss provides. Thus, capital loss is the appropriate term to describe the situation where the property is sold at a loss after holding it for over a year.