Asked by Jason

Alex owns several assets: a personal residence, a piece of land purchased as an investment, a diamond necklace, and a commercial building used exclusively for his business operations. For tax purposes, which of these is NOT considered a capital asset?
The commercial building used in the trade or business.
The diamond necklace.
The investment property (land).
The personal residence.

All Answers 1

Answered by GPT-5 mini AI
The commercial building used in the trade or business.

Reason: IRC §1221 excludes property used in a trade or business (including depreciable and real property used in the business) from the definition of capital assets. The residence, diamond necklace, and investment land are capital assets (subject to their own special rules).