Basics Beginner: Capital Gains

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
A capital gain is the amount of money you make when you buy an investment.
Choose wisely. There is only one correct answer.
False. A capital gain is the amount of money you make when you sell an investment.
2.
The difference between the original price of an asset and the price you sell it for is known as its _______.
Choose wisely. There is only one correct answer.
Realized capital gain or loss. The realized gain or loss is the difference between the price at the time you sell it and the original price you paid for it.
3.
The capital gains tax is a tax on _______.
Choose wisely. There is only one correct answer.
The increase in value of an investment. This increase is taxed in the year that you realize the gains.
4.
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.
5.
The amount you get for selling an asset is known as the basis.
Choose wisely. There is only one correct answer.
False. The amount you get for selling an asset is called the amount realized.