your house drops $50,000 in value, can you claim a loss? shouldn't property taxes drop as well?
2007-09-22 22:06:19 · 8 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Rain, you can not deduct a loss even if you DO sell the house!
2007-09-23 00:28:21 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Q. your house drops $50,000 in value, can you claim a loss?
a. If it drops suddenly because of damage from a fire, flood, or other calamity of that nature, you can deduct that immediately.
b. If the drop is gradual or due to a general drop in the housing market, and it is an investment property (not a house that you use), and you sell it at a loss, then you can claim the loss at that time, but you cannot claim the loss while you own it.
c. If the drop is gradual or due to a general drop in the housing market, and it is the house where you live (not an investment property), then you cannot claim the loss at all.
Q. shouldn't property taxes drop as well?
A.
a. If the drop is gradual or due to a general drop in the housing market, then nothing happens until the next reassessment. Also, because the other houses have also dropped in value, they will need to raise the tax rate in order to receive the same amount of revenue, so your taxes will not change much (and may increase).
b. If there is major damage to your property (like the house burns down, so you have only land remaining), you may be able to have your property tax lowered.
2007-09-23 14:50:08 · answer #2 · answered by StephenWeinstein 7 · 0⤊ 0⤋
You can't claim the loss for Federal taxes. However, you need to file an appeal with your county (or property taxing authority) to have your property taxes lowered.
Remember, the county has no interest in "helping" you pay less property tax especially if your property value was recently reassessed at a higher rate. That is why you need to file the appeal.
2007-09-23 08:49:59 · answer #3 · answered by Steve 6 · 0⤊ 0⤋
Not if it's your personal residence - you can't claim a tax loss on that. If it's rental property, you might be able to.
Property tax assessments are usually way behind changes in the real estate market, whether up or down, so usually property taxes won't change, especially if the changes in value appear temporary.
2007-09-23 12:36:46 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
You can't claim a loss on the value of your house if it is your personal residence - even if you sell it. Once you do sell it, the lower amount you sold it for would be compared to how much you purchased it for. If you are married and the difference is less than $500,000 then you would not have to report a gain on the sale of the house as long as you have used it as you primary residence for 2 of the last 5 years. If the difference is more than $500,000 then you would have to pay a gain on the extra amount.
2007-09-23 11:17:42 · answer #5 · answered by toehead 2 · 0⤊ 0⤋
You can only depreciate rental property, not your own house. You can only claim a loss if you sell the property. Property tax assessed value will change if they do a reassessment, but if all properties are going down, then the tax rate will go up so they can continue to collect enough taxes to cover the budget.
2007-09-23 05:16:46 · answer #6 · answered by Linda K 3 · 1⤊ 2⤋
Tax implications would be reflected in the property tax, although if your property tax is like mine, it's not all that nimble: I don't think mine has changed in the last 5 years.
2007-09-23 05:17:42 · answer #7 · answered by Anonymous · 0⤊ 0⤋
yes, the property tax should drop but you have to call the city to have them recalculate the drop in price. Well you can't have a tax write off unless you sold the house.
2007-09-23 06:13:47 · answer #8 · answered by Rain L 5 · 1⤊ 3⤋