My wife and I bought a double house (and lived in half) in 98 for 72500. Wife died in 99, and I moved out and began renting out both halves of the house in December 99.
Last month I sold the house for what I owed, 52,500. (Yes, the market is that bad).
Can I write off the loss? Can someone direct me to a website that explains some of this stuff? I fully intend to see a tax professional, but want to understand what they tell me with some research on my own. NY State, by the way.
2007-11-08 02:00:08 · 4 answers · asked by Tim C 2 in Business & Finance ➔ Taxes ➔ United States
As clearly stated in the original question, this became a rental property once I moved out. Is this then considered income property, or is it still my personal home?
2007-11-08 02:07:15 · update #1
You can not take a tax loss on the sale of a personal residence.
If you converted part of it to a rental, you may have a writeoff there and should have included on previous years tax returns.
This will be a complicated computation that you probably should have help on.
2007-11-08 02:02:14 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Maybe.
Gains or Losses on investment property are calculated on the sales price less the basis. The basis starts with your purchase price but doesn't end there. You have to add your improvements and subtract the depreciation that you took (or should have taken) when the property was a rental.
If, after all these calculations, you have a loss, it is deductible as a capital loss. Capital losses are first used to offset capital gains and then are deductible at $3000 per year until used up. If you have no gains, your loss will be limited annually to the $3000.
Be prepared to pay a pretty hefty fee for someone to calculate this but also be prepared for not having a huge tax benefit in any one given year for this transaction but something is better than nothing.
2007-11-08 10:27:17 · answer #2 · answered by Wayne Z 7 · 0⤊ 0⤋
We should be able to do so, if things were fair. A business can write off everything under the sun, using depreciation schedules. The homes of our parents and grand parents were always going up in value, now ours is way down. We bought thinking it would make us money, now it's an albatross around our collective necks, drowning us. How wonderful we are in a negative wealth situation, yet the government hasn't gotten the memo that millions of homeowners are broke - wall st. can write it all off, why can't We The People?!/
2014-03-27 02:20:53 · answer #3 · answered by blondeguyone 2 · 0⤊ 0⤋
i am sorry but no you can not. just like when i pay a certain amount for my car and than i sell it for less. i am not able to write that off as a loss. its called deprecation. for the most part when you buy something it starts losing value as soon as you get it or drive it off the lot. Not a bad idea to talk to a tax person though. they may know something i do not
2007-11-08 10:07:21 · answer #4 · answered by carriec 7 · 0⤊ 0⤋