Topic: Capital Gains and Losses: Investments are also called capital assets. If you make money by selling one of your capital assets for a higher price than you paid to buy it, you have a capital gain. In contrast, if you lose money on the sale, you have a capital loss. Capital gains and losses may be a major factor in your portfolio performance, especially if you are an active investor who buys and sells frequently. Profits you make by selling an asset you have held for over a year are considered long-term capital gains and are taxed at a lower rate than your ordinary income. However, short-term gains from selling assets you have held for less than a year do not enjoy this special tax treatment, so they are taxed at the same rate as your ordinary income. That is one reason you may want to postpone taking gains, when possible until they qualify as long-term gains.

I think your definitions are pretty accurate. I was focused on unrealized gains and losses — sometimes called paper gains and losses. I think these result from changes in the market price of your investments while you hold them but before you sell them. If the price of a stock you hold in your portfolio increases and you do not sell the stock at the new higher price, your profit is unrealized because if the price falls later, the gain is lost. Only when you sell the investment is the gain realized — in other words, it becomes actual profit.