Legal Definitions - extraordinary gain

An extraordinary gain is an increase in amount, degree, or value that is both unusual and infrequent. It can be a gain of money or something having monetary value, such as the gain realized from selling a large segment of a business.

For example, if a company sells a subsidiary for a much higher price than expected, the gain from that sale would be considered an extraordinary gain. This type of gain is not expected to occur regularly and is not part of the company's normal operations.

Extraordinary gains are different from ordinary gains, which are gains from the sale or exchange of a noncapital asset. They are also different from recognized gains, which are the portion of a gain that is subject to income taxation.