The part of the Internal Revenue Code that defines a Capital Asset. It actually states what is not a capital asset.
Examples: Under Section 1221 the following are not Capital Assets:
• inventory (such as lots of a subdivider)
• receivables collected in the course of business (such as Notes received from the sale of lots by a Subdivider)
• copyrights and the like held by the creator or certain other parties
• certain U.S. Securities
• real or depreciable property used in a trade or business (see Section 1231)
The following are capital assets:
• the personal Residence that one owns
• raw land held as an investment
• Mortgages held as investments
