Basics Beginner: Capital Gains

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1.
Unrealized gains or losses on your investments must be reported on your tax returns.
Choose wisely. There is only one correct answer.
False. Only realized gains or losses must be reported on your tax returns.
2.
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.
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.
Choose wisely. There is only one correct answer.
False. Long-term gains are taxed at a lower rate than short-term gains.
5.
The amount of time you hold onto an asset is known as the ________.
Choose wisely. There is only one correct answer.
Holding period. The holding period is the amount of time you hold onto your asset.