I sold my home in 2006 that I bought in 1999 and qualifies as my personal residence. (lived in it 3 of the last 5 yrs).The basis in this property is less than the proceeds resulting in a loss. Personal losses are not deductible.
I sold rental property in 2006 resulting in a long term capital gain.
Can I reduce the amount of my long term gain by the amount of the loss on the sale of my principal residence?
2007-02-03 02:30:10 · 3 answers · asked by Chris C 1 in Business & Finance ➔ Taxes ➔ United States
No, you can never take a deduction for a loss on the sale of a personal residence, even to offset the gain on the sale of a rental property.
Had you converted your personal residence to a rental unit you could have used that loss to offset the gain on the other rental. If the loss was enough to wipe out the gain on the sale of the rental, some of the additional loss could have been claimed against your other income with the balance of the loss carried forward to future tax years.
An even better approach (if feasible for you) might have been to move in to the rental for 2 years and rent out your former principal residence and then sell them both. You'd have a recapture of the depreciation claimed on the former rental but that probably would not have been enough to put you over the exclusion amount on the sale of a principal residence and you might have been able to take at least a partial loss on the sale of your former principal residence. Even if you couldn't take the entire loss in the year of the sale you usually can carry forward the loss to future tax years.
Unfortunately it's now too late for either of those tax-saving options.
2007-02-03 02:44:19 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
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2016-11-02 05:14:20 · answer #2 · answered by mosesjr 4 · 0⤊ 0⤋
Sorry, they don't offset each other.
2007-02-03 02:40:38 · answer #3 · answered by TaxMan 5 · 3⤊ 0⤋