Under which of the following circumstances may capital gains arise? 1. When there is an increase in the sales of a product 2. When there is a natural increase in the value of the property owned 3. When you purchase a painting and there is a growth in its

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Q: 1 (IAS/2012)
Under which of the following circumstances may “capital gains” arise?
1. When there is an increase in the sales of a product
2. When there is a natural increase in the value of the property owned
3. When you purchase a painting and there is a growth in its value due to increase in its popularity
Select the correct answer using the codes given below :

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,137,109,20,137,27,62

keywords: 

{'capital gains': [0, 0, 0, 1], 'growth': [1, 1, 1, 0], 'natural increase': [1, 0, 0, 1], 'painting': [1, 0, 0, 1], 'property': [15, 0, 8, 22], 'sales': [0, 1, 0, 0], 'increase': [3, 1, 10, 35], 'value': [0, 0, 1, 0], 'popularity': [0, 0, 0, 2]}

The correct answer is option 2 and 3 only.

Capital gains arise when there is an increase in the value of a capital asset, such as property, stocks, or paintings. Option 1 refers to an increase in sales, which does not necessarily result in capital gains.

Option 2 refers to a natural increase in the value of a property owned, which can result in capital gains if the property is sold at a higher price than the purchase price.

Option 3 refers to an increase in the value of a painting due to an increase in its popularity, which can result in capital gains if the painting is sold at a higher price than the purchase price.