Capital Gains. What are capital gains? When is a capital gain considered short$-$term? When is it

considered long$-$term? Why is this distinction important?

Capital gains occur when individuals: $($Select the best answer below.$)$

A$.$ purchase financial assets $($such as stocks or bonds$)$ or real estate and then sell them for a gain.

B$.$ buy a house and it decreases in value.

C$.$ purchase capital equipment and use it to earn profit.

D$.$ experience an increase in the value of any asset.

A long$-$term capital gain occurs when the asset is held for

than a year. $($Select from the drop$-$down menu.$)$

The distinction between short$-$term and long$-$term capital gains is important because the capital gains tax is a

maximum of: $($Select the best answer below.$)$