What is a capital asset?

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Examples include a home, personal use items like household furnishings, stocks or bonds, collectibles held as investments.

How are capital gains and losses calculated?

When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you paid for it –

 » Read more about: Capital Gains and Losses Explained  »

1. Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.
2. Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
3. Age — must be under the age of 19 at the end of the tax year,

 » Read more about: Four tests to be a qualifying child  »