Question

which statement about capital gains is true? capital gains equals the purchase price minus the market value. capital gains equals the selling price minus the purchase price. capital gain taxes are levied by state governments. taxes on capital gains cannot be cancelled out by investment losses.

Explanation:

Capital gains are calculated as the difference between the selling price and the purchase price of an asset. Option A is incorrect as it uses market value instead of selling price. Capital gain taxes are levied by federal governments (not just state governments), so option C is wrong. Investment losses can offset capital gains for tax - purposes, making option D incorrect.

Answer:

B. Capital gains equals the selling price minus the purchase price.