Note that this does not apply to personal use property (PUP). Gains from this property are subjected to tax but the loss however, is not deductible. The loss from this property is recognized as personal or living expense. The cost used to calculate gain/loss of PUP is the cost resulted from the transaction of PUP which is the greater of the cost and $1000. Similarly, the proceeds of the transaction are deemed to be the greater of the actual proceed and $1000.

For example, if a PUP costs $800 and is sold at $1200 then the PUP gain for this transaction would be (1200-1000) $200.

However, if a PUP costs $1300 and is sold for $700, then there will be a PUP loss of $300 (1300-1000).