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

Question

Responses

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

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 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 specifically to the profit earned from the sale of an asset that has increased in value while it was owned. Therefore, the correct option that is considered to be a capital gain is:

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

The other options do not qualify as capital gains:

• The interest earned from a government bond is considered income, not a capital gain.
• The new value of a stock after the market closes is merely a measurement of its value at a particular time and does not constitute a gain until sold.
• The money lost when a stock is sold for less than it was purchased for is actually a capital loss, not a capital gain.