Question

In 2015, Randy sold his personal use automobile for a loss of $9,000. He also sold a personal coin collection for a gain of $10,000. As a result of these sales, $1,000 is subject to income tax. True or False?

Answer 1

Yes, $1,000 is subject to income tax.

Step-by-step explanation:

In 2015, Randy sold his personal use automobile for a loss of $9,000 and sold a personal coin collection for a gain of $10,000. To determine if $1,000 is subject to income tax, we need to calculate Randy's net capital gain.

Net capital gain = Total gains - Total losses

Net capital gain = $10,000 - $9,000 = $1,000

If Randy's net capital gain is positive, it is subject to income tax. Therefore, $1,000 is subject to income tax.