Answering the question “which of the following is not a capital asset” can be tricky. Knowing what a capital asset is and what it isn’t is essential to understanding taxes and investments. This article will explain the answer to the question and provide further information on capital assets.

What is the Question?

The question at hand is: which of the following is not a capital asset? The options are a. Inventory, b. stocks, c. a personal automobile, d. gold, and e. land.

The Answer

The correct answer is c. a personal automobile. A personal automobile is not considered a capital asset. A capital asset is defined as any property that is not considered stock in trade, personal effects, or agricultural land in rural areas. This includes, but is not limited to, shares of stock held for investment, gold bonds, and special intangible or tangible property.

Capital Assets for 2012

For 2012, the maximum capital gains rate was 15%. Capital losses may be carried back for 3 years and forward for 5 years and can offset capital gains. The following are examples of capital assets:

  • Shares of stock held for investment
  • Gold bonds
  • Special intangible or tangible property
  • Office buildings used as rental properties by a real estate professional
  • Antique automobiles

It is important to note that any stock in trade, personal effects, or agricultural land in rural areas are not considered capital assets.

Conclusion

In conclusion, the correct answer to the question “which of the following is not a capital asset” is c. a personal automobile. Capital assets include shares of stock held for investment, gold bonds, special intangible or tangible property, office buildings used as rental properties by a real estate professional, and antique automobiles. If you have any further questions about capital assets, you can find more information at Atlantabusinesses.com, a great resource for answers to all your questions about selling a business and about business brokers.

What does not qualify as a capital asset?

Non capital assets are any items of business property that are used for the purpose of selling to customers. Examples include inventory, stock in trade, and other products held for the purpose of being sold.

Can you name 5 capital assets?

Capital assets are items of significant value, such as houses, vehicles, investments, stocks, bonds, and even collectible or artistic items.

Which of the following is not classified as a capital asset?

Anything used in a trade or business that is a type of real estate is not considered a capital asset.

What are items that are not considered capital assets by the IRS?

Section 1221 states that a “capital asset” is any property owned by the taxpayer not related to their trade or business, while property used in the taxpayer’s trade or business that is eligible for depreciation under ‘ 167 is not considered a capital asset.