Can you claim property depreciation on your taxes?

Question

Hi, I paid $137,000 for my home in 2003 and it is now worth less than $120,000. I'm basically up a creek without a paddle because this was supposed to be a "starter home" and now i'll never be able to sell it, can you claim depreciation on your taxes?

Answer 1

If you sell your personal home for less than you paid for it, you cannot deduct the loss. Losses on personal use property are never deductible, and depreciation is never allowed.

Since you have not sold your home, you have no loss of any kind right now. Hopefully your home will increase in value, and you will continue to pay down the mortgage, so that at least your debt on the house will be covered when you do sell it.

Answer 2

No, you cannot claim depreciation on your personal residence. If you were to rent it out you could (and should) depreciate it and take a depreciation expense against the rental income.

If you're "upside down" on your mortgage the best bet would be to tough it out for the next few years. Real estate tends to operate opposite to the common wisdom of "What goes up must come down." In real estate, it's "What goes down must come up."

Answer 3

If you weren't going to pay tax on any gain on the property (if it's your only home it's unlikely) then you're not going to be able to claim back any loss either.

In any case you could only claim a loss if you actually sold the property.

Sit tight and accept you may be living in this house for a few years to come, until property prices bottom out and start rising again.

Answer 4

You can only claim depreciation if you are renting it out, not living there

By the way....dont be so melodramatic....just enjoy living in the place for a few more years, and it will go up in value

Answer 5

You can't claim depreciation on a personal residence.

Answer 6

http://www.irs.gov/businesses/small/article/0,,id=137026,00.html