In 2013, Ruth Lee sold a painting for $25,000 that she had
bought for her personal use in 2007 at a cost of $10,000. In her
2013 return, Lee should treat the sale of the painting as a transaction
resulting in

(b) The requirement is to determine the proper treatment
for the gain recognized on the sale of a painting that was
purchased in 2007 and held for personal use. The definition of
“capital assets” includes investment property and property held
for personal use (if sold at a gain). Because the painting was held
for more than one year, the gain from the sale of the painting
must be reported as a long-term capital gain. Note that if personal-
use property is sold at a loss, the loss is not deductible.