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?

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