Question

During 2018, Kim realized losses on the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim recognize?

Answer 1

Answer:

$2,000

Explanation:

Personal losses cannot be deducted, only business related losses are deductible.

The realized loss on the pleasure yacht is considered a personal loss, therefore, it cannot be deducted. Since the car was used for business purposes, the $1,000 is deductible, and the $1,000 loss in stocks is also deductible.