Question

Describe the tax treatment that will be given to personal use property dispositions. How does this treatment differ if the property is listed personal property?

Answer 1

What is and what is not personal use property can vary form tax jurisdiction to tax jurisdiction,particularly when it comes to determining whether the loss on disposition of asset is deductible.typically real estate receives a different tax treatment,even if a home is for personal use.

Technically ,the internal revenue service(IRS) considers personal use property a capital asset and does receive special tax treatment.Taxpayer cannot deduct loses on personal use property,while gain on sale of such property is subject to taxation.

Listed personal property is a type of personal use property ,the principal difference between listed personal property and personal use properties is LPP usually increases in value overtime.ex jewellary,drawing painting etc

To determine the value of LPP iteams you can have them appraised by a dealer.you can also refer to catalogues for the value of the properties.Because LPP is a type of personal use property ,the capital gain or loss on the sale of LPP is calculated as the same way as for personal use property.

so,the tax deduction on LPP will be same as for other capital gain or losses