What term describes a situation where an individual sells a property investment asset for less than its purchase price?

The situation described, where an individual sells a property investment asset for less than its purchase price, is called a capital loss. In the context of real estate and investment, a capital loss specifically refers to the financial loss incurred when an asset is sold for a price lower than its original purchase price.

This concept is crucial for investors as it can affect their overall investment strategy and tax obligations. For instance, capital losses can potentially be used to offset capital gains, which may reduce taxable income. Understanding the implications of capital losses helps investors make informed decisions on when to sell properties and how to manage their investment portfolio effectively.

The other terms, while related to financial transactions, describe different concepts. Capital gain refers to the profit made when an asset is sold for more than its purchase price, asset depreciation relates to the decline in value of an asset over time due to wear and tear, and market loss is a more generalized term that may refer to losses experienced in various market conditions but does not specifically denote a transaction's result like capital loss does.