What Is a Capital Asset?
Identifying Capital Assets
A capital asset generally includes property owned for personal use or investment. Examples include stocks, bonds, land, and a personal residence. Certain business inventory and property held primarily for sale are generally not considered capital assets.
- Investment securities
- Land and buildings held for investment
- Personal-use property
- Collectibles and certain intangible assets
Note
Not every asset qualifies as a capital asset under tax law.
Summary
Correctly identifying a capital asset is the first step in determining capital gain or loss treatment.