I know that if you sell your home within 2 years and make a profit, the government requires that you report it as income. But since I lost money, and sold it within 2 years, can I claim it as a loss? I bought the house as an investment to fix up and flip for more money, but the market screwed me over.
2006-11-08 09:35:16 · 11 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I think a couple of people may have missed the fact that you said this is an INVESTMENT property. If this is your personal residence the answer is, indeed, no. (and since you referred to the 2 out of 5 rule you may have just misspoken when you said investment because that rule ONLY refers to primary residences). However if this was an investment and you lived somewhere else than you can take a capital loss. (If there was personal use AT ALL of the property it is NOT an investment). All of your improvements will be added to basis to possibly increase your loss. Please keep in mind that your capital losses can offset your capital gains and then go to a maximum $3000 ($1500 if MFS). Any excess loss will be a carryover loss to be used in future years.
2006-11-08 14:19:15 · answer #1 · answered by FlCpa 3 · 0⤊ 1⤋
If it was your residence while you owned it, no. If you bought it strictly as an investment to fix up and flip, and DID NOT LIVE THERE, then maybe. Since you refer to it as "your home", I assume you lived there - if that's the case, even though your intent was to flip it, then the loss is NOT deductible.
2006-11-09 00:22:42 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
Steven and Wayne are correct. A loss on the sale of your main home cannot be deducted.
2006-11-08 18:50:15 · answer #3 · answered by RamsGod 3 · 0⤊ 0⤋
10.4 Capital Gains, Losses/Sale of Home: Losses (Homes, Stocks, Other Property)
Is the loss on the sale of your home deductible?
The loss on the sale of a personal residence is a nondeductible personal loss.
Why did Jack comment on Canadian tax law under Taxes->United States?
2006-11-08 17:54:49 · answer #4 · answered by STEVEN F 7 · 2⤊ 1⤋
American laws and Canadian laws regarding loss on the sale of homes are as different as night and day.
In Canada the gain on the sale of your primary residence is not taxable. (Even if you only owned it for a day).The los on the sale is not deductible either.
Unlike the USA, the only properties that are subject to capital gains are those purchased and owned with the expectation of profitability.
Sorry for your loss.
2006-11-08 17:45:51 · answer #5 · answered by Jack 6 · 0⤊ 2⤋
Yes, you can claim it as a loss, but only against capital gains (assuming you weren't living in the house while you owned it, so it is not your primary residence, but an investment property). Talk to an accountant about details.
2006-11-08 17:37:08 · answer #6 · answered by NC 7 · 1⤊ 3⤋
Yes you can, but hire a reputable accountant.
2006-11-08 23:03:03 · answer #7 · answered by jbird35645 2 · 0⤊ 1⤋
Yes you can. But hire a CPA to do your return.
2006-11-08 17:42:57 · answer #8 · answered by Anonymous · 0⤊ 3⤋
What NC said.
2006-11-08 17:38:26 · answer #9 · answered by Notorious 4 · 0⤊ 2⤋
Sorry, not deductable.
2006-11-08 17:57:36 · answer #10 · answered by Wayne Z 7 · 1⤊ 1⤋