The correct answer is: B. capital gain.
A capital gain is a profit that is realized when an asset is sold for more than its purchase price. Capital gains can be realized on the sale of stocks, bonds, real estate, and other assets.
Capital gains are taxed at different rates than ordinary income. For taxpayers in the 2022 tax year, long-term capital gains (gains from assets held for more than one year) are taxed at 0%, 15%, or 20%, depending on the taxpayer’s income. Short-term capital gains (gains from assets held for one year or less) are taxed as ordinary income.
Capital gains can be a significant source of income for some taxpayers. In 2019, capital gains and dividends accounted for 15% of all federal income tax revenue.
Here is a brief explanation of each option:
- Option A: Capital. Capital is a general term for assets that are used to produce goods and services. It can include money, equipment, land, and buildings.
- Option B: Capital gain. A capital gain is a profit that is realized when an asset is sold for more than its purchase price.
- Option C: Capitalism. Capitalism is an economic system in which the means of production are privately owned and operated for profit.
- Option D: None of the above.