____ Gains Are Taxable and Occur When an Asset Is

question 7

Multiple Choice

____ gains are taxable and occur when an asset is sold for more than its basis (the value of the asset when it was purchased by the original owner or inherited by the heirs of the original owner) .

• A) Realized capital
• B) Income
• C) Portfolio
• D) Nominal
• E) Real

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Definitions:

Compounded Annually

Compounded annually refers to the calculation and addition of interest to the principal sum of a loan or deposit once every year.

Simple Interest

Interest calculated only on the principal amount, or on that portion of the principal amount which remains unpaid.

Savings Accounts

Bank accounts that earn interest over time, allowing individuals to deposit funds for future use.

Deposit

A sum of money placed in an account or paid as a part of a transaction to demonstrate commitment or reserve something.