Question

What is a capital gains tax?

• A. A tax on the income earned from employment.
• B. A tax on the value of goods and services sold.
• C. A tax on the profits made from the sale of assets like stocks or real estate.
• D. A tax on the total wealth of an individual or entity.

Answer 1

Answer:

C. A tax on the profits made from the sale of assets like stocks or real estate.

• Capital gains are profits realized from the sale of a capital asset, and this tax is levied on those profits.