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Investing Basics Beginner: Capital Gains

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1.
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.
2.
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.
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.
You can deduct up to _______ in capital losses on your income tax forms each year.
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$3,000. If your losses exceed your gains, you can deduct up to $3,000 in capital losses.
5.
The amount you get for selling an asset is known as the basis.
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False. The amount you get for selling an asset is called the amount realized.