Understanding Capital Gains
This worksheet introduces Grade 10 students to the concept of capital gains, how they are generated, and their basic implications in economics.
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Understanding Capital Gains
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Read each question carefully and answer to the best of your ability. This worksheet covers the basics of capital gains in economics.
1. What is a capital gain?
Money earned from a regular salary
Profit from the sale of an asset
Interest earned on a savings account
Income from renting out property
2. Which of the following is an example of an asset that could generate a capital gain?
A car used for daily commuting
A share of stock bought and then sold for a higher price
Groceries purchased for consumption
Monthly rent payment
3. A capital gain occurs when you sell an asset for a price than you bought it for.
4. Capital gains are often associated with investments such as stocks, bonds, and .
5. All profits from selling property are considered capital gains.
True
False
6. Capital gains are always taxed at the same rate as regular income.
True
False
7. Briefly explain the difference between a short-term capital gain and a long-term capital gain.