This Article discusses the inconsistent federal income tax treatment of gain and loss characterization in the Internal Revenue Code of 1986 upon the sale or other disposition of certain self-created intangibles. The Article asks from a tax policy perspective why some intangibles such as patents, musical compositions, and copyrights in musical works are granted preferred capital gains treatment upon a disposition or sale under the Code, while others—such as literary works, artwork, and nonmusical copyrighted works—are not. The first part of the Article analyzes the statutory definition of a capital asset, its historical outgrowth, and various judicial contractions. Next, the Article questions the various tax policy justifications behind capital gains treatment and the contradictions in according preferred treatment to certain creators of works and not to others. The Article concludes by recommending that Congress amend section 1221(a)(3) to eliminate the inequitable disparity in gain characterization among artists and writers versus inventors and musicians.