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Related to capital asset: Capital asset pricing model
An asset that the owner intends to hold and derive benefits from for a period of more than one year. Capital assets include long-term investments such as land and major equipment. It is difficult to liquidate capital assets, and companies usually do so when they are extremely cash poor. They are intended to help produce a business' profits and are therefore usually necessary investments. For tax purposes, one represents the value of capital assets with the "property, plant, and equipment" figure.
An asset that has an expected life of more than one year and that is not bought and sold in the usual course of business. Buildings and machinery are examples of capital assets.
(1) All property held by a taxpayer except inventory or goods in process. (2) All property except that held for resale to others in the ordinary course of business.
Broadly speaking, all assets are capital assets except those specifically excluded by the tax Code. Major categories of noncapital assets include property held for resale in the normal course of business (inventory), trade accounts and notes receivable, depreciable property, and real estate used in a trade or business.