Question

Which of the following statements is INCORRECT regarding a loss that is generated from the disposal or sale of assets?

a. losses from capital assets are deductible against gains from capital assets.
b. losses from business assets are deductible for agi.
c. losses from personal use assets are deductible for agi.
d. when capital losses exceed capital gains, up to $3,000 can be deducted for agi.

Answer 1

The incorrect statement is that losses from personal use assets are deductible for AGI. In fact, such losses are generally non-deductible for tax purposes, compared to deductible losses from business or investment assets.

Step-by-step explanation:

The incorrect statement regarding a loss that is generated from the disposal or sale of assets is: c. losses from personal use assets are deductible for AGI. This is not accurate because losses from the sale of personal use assets are generally not deductible for Adjusted Gross Income (AGI). Only losses associated with business or investment assets are typically deductible. For example, if you experience a loss from the sale of a business property or an investment, that loss can be used to offset other gains or, if the losses exceed the gains, up to $3,000 of the loss can be deducted against other income for AGI purposes. However, personal losses are not afforded the same treatment.