Recently I sold an antique for 12,000 that I had bought for my personal use in 2004 at a cost of 15,000.
In my 2007 tax return, can I treat the sale of the antqiue as a transaction resulting in long-term capital loss?
2007-05-11 04:19:27 · 5 answers · asked by Mike 1 in Business & Finance ➔ Taxes ➔ United States
The personal use makes your loss non-deductible.
From the IRS website:
Personal-use property. Property held for personal use is a capital asset. Gain from a sale or exchange of that property is a capital gain. Loss from the sale or exchange of that property is not deductible. You can deduct a loss relating to personal-use property only if it results from a casualty or theft.
2007-05-11 04:32:22 · answer #1 · answered by VATreasures 6 · 2⤊ 1⤋
If it were purchased as a collectible investment, then you could write it off as a capital loss. However, since it is for personal use, you can NOT write it off as a capital loss.
According to IRS Publication 550:
"Property held for personal use only, rather than for investment, is a capital asset, and you must report a gain from its sale as a capital gain. However, you cannot deduct a loss from selling personal use property. "
Personal use property, if sold for a gain, must be reported on Schedule D...however, if sold for a loss, can not be reported. Just like if you sell a car or a house for a loss, you do not write it off...but if you sell your car or house at a profit, you have to report it. Of course, most people do not report their home because of the $250,000 / $500,000 exclusion.
To go a little deeper, are you absolutely sure it was personal use? Just because it was hanging on a wall does not (in my opinion anyway) disqualify it as an investment. If you purchased it in the hopes of eventually selling it for a profit, then you should consider it as an investment. If you never intended to sell it, then consider it personal use property.
Good luck :)
2007-05-11 04:53:38 · answer #2 · answered by TaxMan 5 · 2⤊ 0⤋
Kris is not correct, you can't write off depreciation.
All of the other answers, saying no you can't take it as a capital loss since it was a personal item, are correct.
2007-05-11 05:04:49 · answer #3 · answered by Judy 7 · 2⤊ 0⤋
Only if you bought the antique specifically for investment purposes, otherwise you can deduct the estimated depreciation.
2007-05-11 04:23:12 · answer #4 · answered by Kris Z 4 · 0⤊ 5⤋
no
2007-05-11 04:23:34 · answer #5 · answered by Jeff 3 · 1⤊ 0⤋