Final answer:
The government bonds sold by an individual investor should be reported as a capital gain, as capital gains are the increase in value of assets between purchase and sale. Other options, like the sale of equipment, subdivision of real property by a dealer, and sale of inventory, may not qualify as capital gains depending on their use in business operations.
Step-by-step explanation:
Among the options presented, the sale that should be reported as a capital gain is the government bonds sold by an individual investor. Capital gains are typically the increase in the value of an asset between when it is bought and when it is sold. Physical items such as a house, land, art, rare coins or stamps, and financial assets like stocks or bonds can be sold for a capital gain.
When owners of a business consider their sources of financial capital, such as early-stage investors, reinvesting profits, borrowing through banks or bonds, or selling stock, they must also consider the rate of return expected by investors. This return can be a dividend or a capital gain from the sale of the asset.
In the context of the other options: 1) The sale of equipment may or may not be classified as a capital gain depending on whether it is part of normal business operations or an investment; 2) A dealer's sale of subdivided real property is generally considered ordinary business income rather than a capital gain; and 3) The sale of inventory is a regular business transaction and not a capital gain. Thus, it is the sale of the individual's government bonds that counts as a capital gain.