Basics Beginner: Capital Gains

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1.
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.
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.
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.
4.
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.
5.
Almost _______ of all realized capital gains are received from corporate stock sales.
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50 percent. Almost half of all capital gains taxes are taxes on corporate stocks.