What is the defining characteristic of intangible collateral?

The defining characteristic of intangible collateral is its nature as assets that do not have a physical form but hold value. This includes ownership of digital assets and rights, such as intellectual property (copyrights, patents, trademarks), accounts receivable, and other rights that can be legally enforced. Intangible collateral is key in secured transactions as it can be used to secure a loan, providing the lender with a claim on the borrower's future income or rights.

The other options reflect physical or tangible items rather than intangibles. Physical items, like goods, can be touched and are considered tangible collateral. Goods held for business sales relate to inventory, which is also a tangible asset. Affixed items to real estate describe fixtures, which, while they may be valuable, are again physical and not classified as intangible collateral. Understanding the distinction between tangible and intangible assets is crucial in secured transactions, particularly in how they are treated under the Uniform Commercial Code (UCC).