Which statement is true regarding capital gains?

To determine the validity of the statement regarding capital gains, it's important to clarify that capital gains refer to the profit that results from the sale of an asset when the selling price exceeds the purchase price. Understanding this concept includes recognizing that capital gains can be categorized as short-term or long-term, depending on how long the asset was held before sale.

If the statement in question is considered false, it likely presents an incorrect assertion about the nature of capital gains, such as suggesting that they are not taxable under certain conditions or that they arise regardless of the sale price in contrast to the purchase price.

Capital gains tax laws and principles suggest that if an asset is sold at a loss, there are no capital gains realized from that transaction, affirming the need for the selling price to exceed the purchase price for a gain to be recognized. Thus, a statement asserting the correctness of capital gains when, in fact, they do not occur would be inaccurate, leading to a conclusion that the answer is indeed false.