A capital asset is property that is expected to generate future revenue for a business. The distinction between capital assets and operational expenses depends largely on your business. Capital assets are the productive base of your business and this differs greatly from one industry to the next. For example, a utility company may categorize a fleet of cars as a capital asset but a car dealer might categorize cars as inventory. The following are a few common examples of capital asset.
Collectibles & art
Commercial kitchen equipment
Data storage devices
Display cases and shelving
Farm machinery such as tractors
Farm structures such as silos
Media equipment and devices
Railroads and tracks
Restaurant seating and tables
Retail signage and displays
Ships and boats
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A long lasting item of property that can be reasonably expected to contribute to the future profits of a business.
Long-term assets that are used in the operations of a business or held for investment purposes.
Capital assets are treated differently from operational expenses for tax purposes. In general, the costs of acquiring capital assets can't by fully deducted at the time of purchase and must be amortized or depreciated over the life of the asset.
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