A capital gain or loss results from the sale or exchange of a capital asset. It is the difference between the purchase price or acquisition value and the selling price or taxable exchange value of a capital asset. A capital asset is often defined as any asset held not in the ordinary course of the individual's business. Unless otherwise provided by law, capital assets are all assets except: (1) stock in trade or property held primarily for sale or customers; (2) depreciable property or real estate used in trade or business; (3) Federal, State, and Municipal obligations issued after arch 1, 1941, on a discount basis and payable without interest at a fixed maturity date; and (4) personal consumption goods.
