Question

Which of the following are considered to be capital gains?(1 point)
Responses

the profit earned on the sale of an asset which has increased while it was owned
the profit earned on the sale of an asset which has increased while it was owned

the interest earned from a government bond
the interest earned from a government bond

the new value of a stock after the market closes
the new value of a stock after the market closes

the money lost when a stock is sold for less than it was purchased for

Answer 1

Capital gains refer to the profit earned on the sale of an asset that has increased in value while it was owned. Therefore, from the options you provided, the first statement is considered a capital gain:

- **The profit earned on the sale of an asset which has increased while it was owned.**

The other options do not represent capital gains:

- The interest earned from a government bond is considered interest income, not a capital gain.
- The new value of a stock after the market closes does not represent a realized gain or loss; it is simply the market price of the stock at that moment.
- The money lost when a stock is sold for less than it was purchased is referred to as a capital loss, not a gain.

So, the correct answer is the first statement regarding the profit from the sale of an appreciated asset.