Helen Chambers owns and manages an apartment building. She also paints seascapes that she and sells, and she published several volumes of art criticism for which she owns the copyrights. With the profits from the books, she acquired stock in a local art supply company. If Helen sold any foregoing property, which would give rise to capital gains.

Helen can only make a capital gain on assets that she actually owns. She only manages the apartment building but does not own it so if she sells any property, it does not contribute to her capital gain.

The stock in the local art supply company is hers however so if the prices of the stock increased from when she bought it and she sells it, that would give rise to capital gain.

sohail09753 sohail09753 · Answer 2 · 2021-12-24T08:10:52+01:00

Capital gain is the profit earned due to the selling of capital assets that are held by the business. The capital gains are charged for taxation at a fixed percentage rate. The capital gains can be short-term or long-term depending upon the holding period of the asset.

In the given case Helen has only the stocks of a local art supply company in the form of capital assets. The selling of the stocks of the supply company would lead to the rise in the capital gains of Helen Chambers.

The other assets held by Helen are an apartment in the buildings. If the apartment is sold it will not lead to capital gain rather it is the normal sale of assets as the Helen Chambers main business is managing and owning apartments.

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