Noncapital Assets A noncapital asset is property that is not a capital asset. Thefollowing kinds of property are not capital assets. Property held mainly for sale to customers or property thatwill physically become part of merchandise for sale to customers. Accounts or notes receivable acquired in the ordinary courseof a trade or business for services rendered or from the sale of anyproperties described in (1). Depreciable property used in your trade or business (even iffully depreciated). Real property used in your trade or business. A copyright, a literary, musical, or artistic composition, aletter or memorandum, or similar property -- Created by your personal efforts, Prepared or produced for you (in the case of a letter,memorandum, or similar property), or Acquired from a person who created the property or for whomthe property was prepared under circumstances (for example, by gift)entitling you to the basis of the person who created the property, orfor whom it was prepared or produced. U.S. Government publications you got from the government forfree or for less than the normal sales price or that you acquiredunder circumstances entitling you to the basis of someone who got thepublications for free or for less than normal sales price. Property held mainly for sale to customers.Stock in trade, inventory, and other property you hold mainly forsale to customers in your trade or business are not capital assets.Inventories are discussed in Publication 538,Accounting Periodsand Methods. Business assets.Real property and depreciable property used in your trade orbusiness or as rental property (including section 197 intangiblesdefined later under Dispositions of Intangible Property)are not capital assets. Their treatment is discussed in chapter 3. Letters and memorandums.Letters, memorandums, and similar property (such as drafts ofspeeches, recordings, transcripts, manuscripts, drawings, orphotographs) are not treated as capital assets if your personalefforts created them or if they were prepared or produced for you. Noris this property a capital asset if your basis in it is determined byreference to the person who created it or the person for whom it wasprepared. For this purpose, letters and memorandums addressed to youare considered prepared for you. If letters or memorandums areprepared by persons under your administrative control, they areconsidered prepared for you whether or not you review them.