WHAT IS SUBJECT TO CAPITAL GAINS TAX?

The capital gains tax is really a tax on the capital that builds up in investments. A capital investment can be a home, a business, artwork, or nearly anything that increases or decreases in value over a period of time. Almost half of all capital gains taxes are taxes on corporate stocks.

Some collectibles also qualify for capital gains taxes, including:

Art Antiques Metals/Gems Stamps

For collectibles, however, the maximum tax rate is 28 percent rather than the 5 percent to 15 percent used for securities. Capital gains taxes do not apply to anything you sell regularly through your business, which is classified as inventory.

To wrap up this tutorial, let's look at a few more terms you need to know.