Capital Gains and Losses

Capital Assets - Most property an individual owns and uses for personal or investment purposes is a capital asset. For example,a house, furniture, car, stocks, and bonds are capital assets. Noncapital Assets- Stocks,real estate used in business.

Investment Property -is property held for the production of income or anticipated appreciation in value. A gain or loss from the sale or exchange of investment property, such as stocks and bonds, is a capital gain or loss.

Capital gains and losses must be separated according to how long the individual held or owned the property. If your holding time is more than 1 year, you will be taxed at a lower rate than your regular income is taxed.