@jdc001 wrote:
Definitely some inequities in the system. Stock, a personal investment in most cases, that is, not business, is taxed on gain and losses go against gain, either short or long term, however, a personal automobile is treated differently, even if you feel the value of the automobile will go up over time, such as the Austin Healey. You are taxed on gain, but not allowed loss. Don't you just love this system we have!? In case of a car it would be better set it on fire and call it a casualty loss than to sell it in some cases.
That is very silly. If you torch the Austin, you have a personal loss of $3000 which is not deductible, or you get an insurance payment which is a crime. If you sell it for $40,000, you net $34,000 after the capital gains tax, and don't have to change your wardrobe to an orange jumpsuit.
I don't know the history of why personal capital losses are not deductible, but it's been that way for decades. However, remember that these laws apply to "property" and property is anything you can have a defined ownership interest in. If you could deduct capital losses on personal property, you could buy a Brooks Brothers suit for $1000, wear it for a few years, then sell it on eBay for $10 and deduct a $990 loss, making everything you buy (that you don't consume) essentially free.
