Question

painting is acquired by an individual for use in his home. The painting is not of investment quality. It is later sold at a loss of $45. Which of the following statements is correct? The painting was a capital asset. The loss on the painting is not deductible. The loss on the painting is a deductible capital loss. The painting was an ordinary asset. a. and b.ting is acquired by an individual for use in his home. The painting is not of investment quality. It is later sold at a loss of $45. Which of the following statements is correct?

Answer 1

Answer:

The correct answer is e. a. and b.

Explanation:

Capital assets are assets of a permanent nature used in the production of income, such as machinery, buildings, equipment, land, etc. It must be distinguished from inventory.

Painting is a capital asset, but it is also a personal use activity asset sold at a loss. The loss is not deductible.