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1.
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.
2.
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.
3.
Long-term capital gains are taxed at a higher rate than short-term capital gains.
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False. Long-term gains are taxed at a lower rate than short-term gains.
4.
The capital gains tax is a tax on _______.
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The increase in value of an investment. This increase is taxed in the year that you realize the gains.
5.
Sales of art, antiques, gems, and stamps are exempt from capital gains taxes.
Choose wisely. There is only one correct answer.
False. Collectibles, including art, antiques, gems, and stamps, are subject to capital gains taxes.