Capital assets are items held for personal or investment purposes. A capital asset can be anything except inventory, depreciable personal and real property used in trade or business, items created by the taxpayer's individual effort (such as a poem), accounts receivable, or certain government publications. Capital assets include stocks and bonds held in the taxpayer’s personal account, a home, furnishings, vehicles, collectibles, gems, jewelry, gold, silver, etc. Losses from personal use of assets are not deductible (for example, a home) unless they resulted from a casualty.
The holding period determines whether the capital gain or loss is long-term or short-term. To determine the holding period, start counting on the date after the day the taxpayer acquired the property. It includes the day the taxpayer sold the property. Short-term property is property held one year or less. Long-term property is property held for more than one year. Short-term gains and losses are netted against each other as are long-term gains and losses. To calculate the total net gain or loss, combine the net short-term gains or losses with the net long-term gains or losses. The result is entered on line 16, Part III of Schedule D.