commercial activities

Capital Gains

Profit on the sale of a capital asset, such as stock or real estate. If a person sells a primary residence, current tax law lets the seller exclude $250,000 in profit from capital gains tax. A couple can exclude $500,000.

Capital Expenditure

Known as CAPEX, capital expenditures describe funds used by a business to upgrade or acquire new physical assets, such as tools and other equipment, for the purpose of attaining future benefits.  In the accounting context, capital expenditures are listed to an asset account.

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