In early 2011, Ben sold a yacht, held for 9 months and for pleasure, for a $5,000 gain. Concerned about offsetting the gain before year-end, Ben is considering selling one of the following, each of which would yield a $5,000 loss:
I. A houseboat used for recreation
II. A truck used in a business
III. A stock investment held for 13 months
Evaluate each choice. Which is the best option for tax purposes? Why?
The best option for tax purposes will be a stock investment held for 13 months, because this asset is not very important in production and will not need to pay taxes from the operation.