I received a compliance question, and I'm not aware of the best way to deal with it.
X inherits an object and sells if on eBay for less than the tax basis. But eBay sends a 1099.
This apparently is a one-time sales, so would Schedule C be appropriate to show no taxable income? Or is there another way to do that.
Thanks for any insight you can give me.
I can't see why that's not a straight Schedule D (or form 8829) item. X isn't in the _business_ of inheriting things, is he? (It's not logically impossible, but it doesn't seem likely.)
In many cases, losses on the sale of inherited objects can be allowed, even if the item was a personal (i.e., non-business, non-investment) asset in the hands of the deceased, and would be a personal item in the hands of X if it were used. If X doesn't use the object, it may be an investment object in his hands.
-- Arthur Rubin, Brea, CA
Thanks. That makes a lot of sense.
Arthur says: "If X doesn't use the object, it may be an investment object in his hands."
Based on what, and with what result?
Case law (perhaps I can find references when i get home) and the result is that capital losses may be deductible. Capital losses on personal use items are disregarded.
-- Arthur L. Rubin, Brea, CA
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