Basics Beginner: Capital Gains

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1.
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.
2.
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.
3.
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.
4.
The difference between the original price of an asset and the price you sell it for is known as its _______.
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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.
5.
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.