Capital Assets : A Guide for the Novice, with Tips for the Experienced

This article discusses what is usually thought of as a routine issue, but which many people, including at least some tax professionals, get wrong: What is a capital asset for federal income tax purposes? For one thing, the term covers lots of property that almost no one thinks of as a capital asset, like your underwear. On the other hand, despite what many think, the machinery you use in your business and the land on which your factory sits aren't capital assets. The article considers these characterization issues, and, most important, discusses what difference it can make whether an item is a capital asset or not