For income tax purposes, capital gains are gains that result from the sale of a capital asset. Generally, a capital asset includes all types of property except property that is: stock in trade, held primarily for sale, depreciable or real property used in a trade or business, a copyright or similar property, accounts or notes receivable, a U.S. government obligation, or property that is part of a hedging transaction.
Gain on depreciable or real property used in a trade or business is not,
strictly speaking, capital gains; however, it will generally be subject to
favorable capital gains tax rates under separate provisions of the federal tax