Why is it important for a taxpayer to consider whether an asset is a $$capital asset$$ or not?

Question $5$Answer

The gains on capital assets are generally taxed at higher rates than those for ordinary income, so the classification as a capital asset should be avoided

The gains on capital assets are generally taxed at lower rates than those for ordinary income, so the classification as a capital asset should be sought

Capital assets cannot be held for more than one year without incurring higher rates on gains, so they should be disposed of within a year

Capital assets include depreciable property used in a trade or business, and such capital assets receive more favorable depreciation rates than other assets

None of the above is true