In a sale involving losses, which asset's loss is deductible for a self-employed individual?

For a self-employed individual, the sale of unused materials from a business is considered a deductible loss because it relates directly to the business's operations. When a business sells its unused materials, any loss incurred can typically be deducted on the individual's tax return, as it arises from a business activity. This deduction helps to accurately reflect the financial performance of the business.

In contrast, the sale of stock usually results in capital gains or losses, which are subject to different tax rules. While capital losses can be deductible, they are limited to specific conditions and may not be as immediately relevant for a self-employed individual's ordinary business income.

The sale of a personal boat is considered a personal asset rather than a business asset. Losses incurred through the sale of personal property are generally not deductible, as personal-use assets are treated differently under tax law.

Thus, the only option that allows for a deduction of the loss in a sale scenario relevant to the context of self-employment is the sale of unused materials from the business.