Basics Beginner: Capital Gains

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1.
Short-term assets are assets held _______ month(s) or fewer.
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Twelve. This has implications for taxation.
2.
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.
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.
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.