Willie sells the following assets and realizes the following gains (losses)during the current year:
$\begin{array}{lr}
\text { Personal auto } & \$(5,000) \
\text { Municipal bonds } & (7,000) \
\text { Stamp collection } & 4,000 \
\text { Furniture } & (6,000) \
1 \% \text { interest in oil well } & (8,000)
\end{array}$
As a result of these sales,Willie's adjusted gross income will:

Question

Quizplus · Accepted Answer

The sale of personal assets, such as a personal auto, furniture, and a stamp collection, does not affect adjusted gross income. The sale of municipal bonds results in a loss, which is not deductible. The sale of an interest in an oil well results in a loss, which is deductible as a miscellaneous itemized deduction subject to a 2% of AGI floor. Therefore, Willie's adjusted gross income will decrease by the amount of the deductible loss on the oil well, which is $8,000.

Willie Sells the Following Assets and Realizes the Following Gains