Y suffered a theft of depreciable assets that were held for two years for use in her business.The assets were worth $1,000 and had a basis of $1,200.Y's only other property transaction resulted in a short- term capital loss of $2,500.What is the impact on Y's adjusted gross income?

Question

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The theft of depreciable assets results in a $200 gain ($1,200 basis - $1,000 value). The short-term capital loss of $2,500 is fully deductible. Therefore, the net impact on Y's adjusted gross income is a reduction of $3,700 ($2,500 + $200).

Y Suffered a Theft of Depreciable Assets That Were Held