Mike sold equipment he is no longer using in his business at a loss of $$4,000,$ and he sold investments at a loss of $$8,000.$ Mike had no other sales of property in the current year. What are the tax implications of these losses to Mike?

Multiple choice question.

Deduct $$3,000$ of the loss on equipment and $$3,000$ of the loss on investment in the current year. The remaining losses are carried forward.

Deduct both losses in their entirety in the current year.

Deduct the $$4,000$ loss on equipment but not the $$8,000$ investment loss as this is considered a personal asset.

Deduct the $$4,000$ loss on equipment and $$3,000$ of the loss on investment in the current year. The remaining investment loss is carried forward.