Question

Which of the following is a capital asset for Ramon? a.The securities he holds more than 12 months. b.The securities he designates as held for investment at the end of the day of acquisition. c.The securities he buys and sells each day in the normal course of his business. d.All the securities he owns. e."The securities he designates as held for investment at the end of the day of acquisition", "The securities he holds more than 12 months", and "All the securities he owns".

Answer 1

Answer: A - The securities he holds more than 12 months

Explanation: A Capital Asset is an asset held for more than one year and that are not easily converted to cash. They can be tangible or intangible.

Capital Assets are what an organisation keeps for the future that appreciates in value. Examples of capital Assets are Plant & Machinery, Land & Building, Stocks in public quoted companies good will etc

Capital Assets are capital intensive(expensive) due to the nature of the asset.