Question

which of the following is a capital asset?
a. A literary work held by the author.
B. Real estate held by developer
c. A taxpayer's principle residence.
d. A truck used in a taxpayer's business.
e. none of the above.

Answer 1

c. A taxpayer's principle residence.

Reason:A capital asset includes assets that are not classified as other types of property, and usually includes assets used for enhancing profit warning capacity of business. Examples of other capital assets include the taxpayer's primary residence, timber grown on home property, household furnishings, personal automobile, coin and stamp collections, and jewelry. Capital assets do not include stock in trade of the taxpayer (inventory), copyrights, accounts or notes receivables, and property subject to depreciation.