The same asset may be an ordinary asset in the hands of one taxpayer and a capital asset in the hands of a different taxpayer.

Question

Quizplus · Accepted Answer

The determination of whether an asset is an ordinary or capital asset depends on the nature of the asset, how it was used by the taxpayer, and the taxpayer's holding period. Therefore, it is possible for the same asset to be an ordinary asset for one taxpayer (if it is used in their business or trade) and a capital asset for a different taxpayer (if it was held for investment purposes).

The Same Asset May Be an Ordinary Asset in the Hands