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Investing Basics Beginner:
Capital Gains
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1.
Short-term assets are assets held _______ month(s) or fewer.
Choose wisely. There is only one correct answer.
One
Six
Twelve
Eighteen
Twelve. This has implications for taxation.
2.
Art may be subject to capital gains taxes when it is sold.
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True
False
True. Some collectibles, such as art, also qualify for capital gains taxes.
3.
Unrealized gains or losses on your investments must be reported on your tax returns.
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True
False
False. Only realized gains or losses must be reported on your tax returns.
4.
You have a capital loss on an investment if your amount realized is less than your basis.
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True
False
True. The amount realized is what you earn from a sale, and the basis is what you paid for it.
5.
The capital gains tax is a tax on _______.
Choose wisely. There is only one correct answer.
The increase in value of an investment
Dividend earnings from investments
Inventory
The increase in value of an investment. This increase is taxed in the year that you realize the gains.
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