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Capital asset

As a real estate term, capital asset means property of a permanent nature which is used in the production of an income. Examples include land, buildings, machinery and equipment. As an accounting term, capital asset means property intended for use or possession for a period longer than one accounting cycle (usually for a period of longer than one year). As a taxation term, capital asset means all property other than specifically excluded items such as inventory and property used in trade or business, I.R.C. § 1221.

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