Basics Beginner: Capital Gains

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1.
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.
2.
You have a capital loss on an investment if your amount realized is less than your basis.
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True. The amount realized is what you earn from a sale, and the basis is what you paid for it.
3.
Sales of art, antiques, gems, and stamps are exempt from capital gains taxes.
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False. Collectibles, including art, antiques, gems, and stamps, are subject to capital gains taxes.
4.
Having an unrealized gain means your asset decreases in value while you are still holding it.
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False. A gain is unrealized if an asset increases, not decreases, in value while you are still holding onto it.
5.
Short-term assets are assets held _______ month(s) or fewer.
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Twelve. This has implications for taxation.