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Essay Available:
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1 page/≈275 words
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APA
Subject:
Law
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Essay
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English (U.S.)
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Topic:

Capital Gains Tax

Essay Instructions:

Vincent pays $20,000 for equipment to use in his trade or business. He pays sales tax of $800 as a result of the purchase. Must the $800 tax be capitalized as part of the purchase price?
Vincent's friend tells him that capital gains tax is discriminatory in that it is imposed upon individuals who can afford to buy capital assets. Do you agree or disagree? Why? Why not? Be sure to include definitions of capital asset and capital gain in your response.

Essay Sample Content Preview:

Capital Gains Tax
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Capital Gains Tax
According to Orem and Parys (2022), capital tax is the taxation imposed on the sale of an investment or long-term asset at a profit. The extent to which the tax applies depends on how long the assets as been held before it is sold. As a result, assets held for a period not exceeding more than one year attract short-term capital gains tax. On the other hand, long-term capital gains tax is imposed on capital gains arising from the disposal of investments or properties held for a period exceeding one year. Bragg (2022) defines capital assets as an investment in which the company expects to derive value in a long period exceeding one year by exploiting the asset. Capital assets typically have a useful life of more than a year and are not expected to be sold as part of the business's regular operations.
Vincent's purchase of $20,000 equipment appears to be a capital acquisition. Consequently, it will be ...
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