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Investing Basics Beginner: Capital Gains

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1.
A capital gain is the amount of money you make when you buy an investment.
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False. A capital gain is the amount of money you make when you sell an investment.
2.
The amount of time you hold onto an asset is known as the ________.
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Holding period. The holding period is the amount of time you hold onto your asset.
3.
Art may be subject to capital gains taxes when it is sold.
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True. Some collectibles, such as art, also qualify for capital gains taxes.
4.
Long-term capital gains are taxed at higher rates than short-term capital gains.
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False. Long-term gains are taxed at lower rates than short-term gains. This is meant to encourage investors to invest for longer periods.
5.
Unrealized gains or losses on your investments must be reported on your tax returns.
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False. Only realized gains or losses must be reported on your tax returns.