In 2012, Warren sold his personal use automobile for a loss of $9,000.He also sold a personal coin collection for a gain of $10,000.As a result of these sales, $1,000 is subject to income tax.

Question

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The net result of the sales is a gain of $1,000, not a subject to income tax. The loss from the sale of the automobile can be used to offset taxable gains from other sources, but it does not directly affect the taxable income.

In 2012, Warren Sold His Personal Use Automobile for a Loss