Basics Beginner: Capital Gains

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1.
A capital gain is the amount of money you make when you buy an investment.
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False. A capital gain is the amount of money you make when you sell an investment.
2.
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.
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.
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.
The amount of time you hold onto an asset is known as the ________.
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Holding period. The holding period is the amount of time you hold onto your asset.