Mary sells her personal use automobile for $20,000.She purchased the car two years ago for $17,000.What is Mary's recognized gain or loss? It increased in value due to its excellent mileage plus a safe design.
A)$0
B)$3,000
C)$17,000
D)$20,000

Question

Quizplus · Accepted Answer

Mary has a recognized gain of $3,000 ($20,000 sales price - $17,000 purchase price). The fact that the car increased in value due to its excellent mileage and safe design is irrelevant for tax purposes as it is not a factor in determining the gain or loss on the sale of a personal use automobile.

Mary Sells Her Personal Use Automobile for $20,000