Net proceeds definition
/What are Net Proceeds?
Net proceeds is the amount of funds received from a sale transaction, after all sale-related fees have been paid. Examples of these fees are closing costs, commissions, and credit card fees. These fees do not include the cost of the asset that was sold.
Example of Net Proceeds
Here are several examples of the net proceeds concept:
Sale of a painting. An artist sells a painting through an art gallery for $10,000. The gallery takes a 40% commission, so the net proceeds for the artist amounts to $6,000.
Sale of a house. A couple sells their house for $700,000, paying a 5% commission on the arrangement. This leaves them with net proceeds of $665,000.
Sale of securities. An investor sells $100,000 of bonds, on which a transaction fee of $500 is charged. His net proceeds are $99,500.