Question

Assets such as works of art, antiques, stamps and coins held for more than one year are referred to a ___________________________ The maximum capital gains tax rate applied to the gain on the sale of these assets is _________.

A) Collectibles; 20%

B) Tangible assets; 28%

C) Appreciable assets; 15%

D) Non-financial assets; 25%

Answer 1

Assets such as works of art, antiques, stamps, and coins held for more than one year are known as collectibles, and the maximum capital gains tax rate for these is 28%.

Step-by-step explanation:

Assets such as works of art, antiques, stamps, and coins held for more than one year are referred to as collectibles. The maximum capital gains tax rate applied to the gain on the sale of these assets is 28%. Therefore, the correct answer to the student's question is B) Collectibles; 28%.

Investing in tangible assets like collectibles can provide returns both in the form of services and potentially higher selling prices in the future. However, the rate of return on such investments is typically moderate, and they can be associated with moderate to high risk due to market volatility. Additionally, liquidity is low, meaning that it often takes considerable time and effort to convert these assets into cash.