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.
Art may be subject to capital gains taxes when it is sold.
Choose wisely. There is only one correct answer.
True. Some collectibles, such as art, also qualify for capital gains taxes.
2.
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.
3.
Having an unrealized gain means your asset decreases in value while you are still holding it.
Choose wisely. There is only one correct answer.
False. A gain is unrealized if an asset increases, not decreases, in value while you are still holding onto it.
4.
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.
5.
You have a capital loss on an investment if your amount realized is less than your basis.
Choose wisely. There is only one correct answer.
True. The amount realized is what you earn from a sale, and the basis is what you paid for it.