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20 January, 04:10

Rebecca sells her personal scooter for $550. She purchased the scooter for $700 three years ago. In addition, Rebecca sells a painting for $1,200 that she acquired five years ago for $900. What are the tax implications attributable to these sales?

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  1. 20 January, 08:01
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    loss = $150 personal use it cannot be offset and not deductible

    gain = $300 seller have option to chose capital gain tax or include gain with income paying proper amount tax as per tax bracket

    Explanation:

    given data

    sells scooter = $550

    3 year ago purchased scooter = $700

    sells a painting = $1,200

    five years ago acquired = $900

    solution

    we know that here sale of scooter is results in loss that is

    loss = $700 - $550

    loss = $150

    and we know loss from sale of property undertaken for personal use is not recognized so for personal use it cannot be offset and not deductible here

    and

    for painting sale it results in gain that is

    gain = $1,200 - $900

    gain = $300

    and selling painting is acquire more than 1 year

    and here sale cost is more than acquire cost

    so seller have option to chose capital gain tax or include gain with income paying proper amount tax as per tax bracket
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