Assume instead that the Bennetts resided in a very depressed neighborhood and the home purchased in 2002 for $200,000 (capital improvements of $40,000) was sold for only $110,000. How much loss is recognized?
A) $200,000
B) $130,000
C) $90,000
D) $-0-
E) None of the above

Question

Quizplus · Accepted Answer

the Bennetts have a realized loss of $130,000 ($110,000 less $240,000), But none of it is recognized, since taxpayers are not allowed to deduct losses on the sale of personal-use assets.

Assume Instead That the Bennetts Resided in a Very Depressed