"Capital Assets" are assets that are not meant to be sold quickly as part of your everyday business, or assets you own for personal use or to grow in value over time.

Think of it like this:

For a business: They are the big-ticket items that help the business run or grow, but aren't what they normally sell. For example, a bakery's oven, the delivery van, or the building it operates in. They use these things to make money, but they don't sell ovens or vans every day.

For an individual: It's almost anything valuable you own that isn't your regular income. This could be your house, your car (if not for a business), a piece of art, jewellery, stocks, bonds, gold& silver or even your collection of rare stamps.

The key idea is that you usually buy them to keep for a while, either to use them or hoping they'll become more valuable.

Why are Capital Assets Important for Tax?

This is where "capital assets" get really important for your wallet, especially when you sell them.

The profit (or loss) you make when you sell a capital asset is usually treated differently by tax authorities than your regular income (like your salary from a job). This special treatment is called Capital Gains Tax.

Depending in what country you reside special tax rates (possibly lower) may apply, losses may be able to offset against capital gains, timing may matter (how long you have owned the asset), if they are considered “personal use” and in some countries even full exemptions when selling a normal primary residence.

In essence, knowing what a "capital asset" is helps you understand:

When you might owe tax on a profit that isn't your salary.
How that profit will be taxed (potentially at a lower rate).
How losses from selling assets can help reduce your tax bill.
That the longer you hold an investment, the better the tax treatment might be.

It's all about making sure you pay the right amount of tax when you buy, hold, and sell valuable items, and potentially taking advantage of rules that can save you money.

Understand more about Capital Gains Tax - https://www.dbm.education/products/198056-Capital-Gains-Tax-For-Beginners

https://www.dbm.academy/faq for more blockchain vocabulary.

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