What triggers capital gains tax?

Capital gains tax is triggered when an individual sells an investment for a profit, meaning that the sale price exceeds the original purchase price. This profit is recognized as a capital gain and is subject to taxation depending on various factors, such as holding period and the individual's income tax bracket. Essentially, the act of selling an asset at a higher price than it was bought for crystallizes the gain, making it taxable.

The other options are related to different aspects of investing but do not directly lead to capital gains tax. Receiving dividends pertains to income from investments but does not involve the sale of an asset. Realizing losses on sold assets, while it affects overall tax liability (as it could offset gains), does not trigger capital gains tax. Finally, accumulating income through interest payments is a different type of taxable income that does not fall under capital gains. Thus, the correct understanding of capital gains tax highlights the importance of profit derived from selling an investment at a higher value than its initial cost.