Why do we distinguish gains as either ordinary or capital? Please supply examples with your explanations.© BrainMass Inc. brainmass.com June 4, 2020, 12:26 am ad1c9bdddf
With regard to investments, ordinary income is earnings that an investment instrument earns or pays out . Interest earned on bonds, T-bills, savings accounts, money market accounts, or lending accounts are all classified as ordinary gains.
Ordinary income also includes salaries, and wages, profits from a business
Capital gains are ...
The differences between how capital gains and ordinary gains are earned and treated for tax purposes with examples.