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Confusingly, §1221 defines what is not a capital asset.TrueFalse

Question

Confusingly, §1221 defines what is not a capital asset.

  1. True
  2. False
check_circleAnswer
Step 1

Capital Assets:

All property that taxpayers own is capital asset, unless it falls into one of the following five categories:

  1. Depreciable property and land used in a trade or business.
  2. Business receivables includes accounts and notes receivables
  3. Inventory held primarily for sale to customers. It includes property that will become part of inventory such as raw materials and work in process.
  4. U.S. government publications purchased for less than the normal sales price.
  5. Copyrights literary, musical or artistic compositions created by the tax payers, or letters and memorandums created by prepared or produced for the tax payers.
Step 2

Yes, §1221 defines those assets that ar...

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