Capital Asset


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Related to Capital Asset: Capital asset pricing model

Capital Asset

Property held by a taxpayer, such as houses, cars, stocks, bonds, and jewelry, or a building owned by a corporation to furnish facilities for its employees.

Excluded from capital assets are certain items stated in the Internal Revenue Code, for example (1) trade or business property subject to depreciation allowance under the tax laws; (2) real property used in trade or business; (3) certain categories of copyrighted materials and Literary Property; and (4) accounts or notes receivable acquired in the ordinary course of business.

The determination of what constitutes a capital asset is essential to the tax treatment of the profits from the sale of property as capital gains, which are taxed at a lower rate than ordinary income.

References in periodicals archive ?
There are few markets that offer as much in the way of dynamism as China," said Charles Worth, Executive Vice-President and Co-Chief Investment Officer at Nippon Capital Asset Management J-LLC.
Rather, the essential features of a capital asset are that it will be used in operations and that it has a useful life extending beyond a single reporting period.
In Hort and Lake, the Supreme Court narrowed the definition of capital asset by establishing the "substitute for ordinary income" exception.
The court ruled that the lots in question were capital assets in the hands of the taxpayers.
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There is, paradoxically, no lender of last resort and no liquidity backup for income-producing capital assets.
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To recognize capital gains, however, the taxpayer must be able to prove the sale or exchange of a capital asset.
The Governmental Accounting Standards Board just released a new standard on when and how governments should recognize that the service potential of a capital asset has been impaired.
These prior articles pointed out that a taxpayer holding a capital asset or an asset used in the taxpayer's trade or business on Jan.
In the aftermath of the Arkansas Best decision, the courts, the IRS, and taxpayers have struggled to divine the extent to which property or positions acquired in "hedging transactions" either fall within one of the enumerated statutory exceptions contained in section 1221 or are otherwise properly excluded from the definition of a capital asset.
Parsons Brinckerhoff, a 100-year old international design, planning, and facilities firm, has announced a firmwide initiative to provide Capital Asset Management (CAM) services.

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