Which asset is NOT generally considered a capital asset?

A computer used in a business is not generally considered a capital asset because it is classified as a business asset or depreciable property. In tax terms, capital assets are typically defined as personal properties held for investment or personal use, such as stocks, bonds, and personal items like a home or personal vehicle.

In contrast, assets that are used in the course of running a business, such as computers, machinery, and office equipment, fall under a different category. These items are subject to depreciation because they are used to generate income and are not intended for investment purposes or personal use. The IRS distinguishes between capital assets and business assets, which is crucial for tax treatment, including how capital gains or losses are calculated upon the sale of these assets.

Understanding this distinction is important for effective tax planning and reporting since the treatment of gains or losses from the sale of capital assets differs from the treatment of business assets in terms of taxation.