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1.
The capital gains tax is a tax on _______.
The increase in value of an investment. This increase is taxed in the year that you realize the gains.
2.
The difference between the original price of an asset and the price you sell it for is known as its _______.
Realized capital gain or loss. The realized gain or loss is the difference between the price at the time you sell it and the original price you paid for it.
3.
The amount you get for selling an asset is known as the basis.
False. The amount you get for selling an asset is called the amount realized.
4.
Art may be subject to capital gains taxes when it is sold.
True. Some collectibles, such as art, also qualify for capital gains taxes.
5.
A capital gain is the amount of money you make when you buy an investment.
False. A capital gain is the amount of money you make when you sell an investment.