GAIN RECOGNITION PERSONAL ASSET:EXAMPLE
01.Core Concepts
Belle purchased a Ferrari 10 years ago for $80,000. She used the car for personal purposes and sold it earlier this year. Because the model she purchased was a limited edition, she was able to sell the car for $90,000 even though she used it for over 10 years. Belle’s gain is calculated as follows: Amount Realized: $90,000 Less: Adjusted Basis: - $80,000 Equals: Gain or (Loss): $10,000 The realized gain of $10,000 must be recognized on her income tax return this year.