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What is a capital asset?

SOLVEDby TurboTax580Updated December 12, 2023

Just about everything you own and use for personal or investment purposes is a capital asset, for example:

  • Personal investment property, stocks, bonds, and mutual funds
  • Real estate or property that isn't rented out or used for business
  • Your dwelling, furniture, appliances, clothing, and personal car
  • Collectibles, such as a coin or baseball card collection

Common items that aren't used for personal or investment purposes (and are therefore not considered capital assets) include:

  • Equipment, vehicles, and real estate used for or by your business
  • Business inventory and accounts receivable
  • Artwork, musical compositions, and literature you created (or were gifted/inherited from the artist)
  • The part of your house that you use and depreciate as your home office, if it qualifies for a home office deduction
  • Rental property

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