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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
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With substantially reduced cash down payment requirements, the small business is able to retain more cash in the business for working capital and operational needs instead of sinking cash into a large capital asset.
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Target: Midas Capital Asset Management (Pty) Ltd (MCAM); MCI subsidiary Midas Capital (Guernsey) Ltd; Midas Capital International Ltd (MCI)
If asked to provide the quintessential example of a capital asset, most probably would reply "land" or "buildings" Yet not every parcel of land or building necessarily qualifies as a capital asset.
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Keywords: Asset Pricing Theory, Capital Asset Pricing Model (CAPM), Pakistan Stock Exchange (PSX), Return on Securities
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