Can I claim a loss on the sale of my home?

August 13, 2014 by Dave Du Val, EA
houses

Hey Dave,

My personal residence cost basis is higher than the expected sale price. Is there a way to get a tax benefit from a loss on this property?

Misha



Misha,

I wish I had better news for you.  As a general rule, losses from the sale of your personal residence are nondeductible. This “theme” can be found throughout the tax code − if the item (your personal home, in this case) is not for business or investment use, then the resulting loss is considered personal and, therefore, not deductible.  Another good example of this is the sale of a personal use vehicle.  Ninety nine percent of the time we take a loss on the sale, and it is not deductible.

Deductibly Yours,

Dave

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Rhonda was a Seasonal Tax Return Reviewer at TaxAudit before joining the permanent staff as an Audit Representative in 2009. She has a Bachelor of Science in Computer Science and worked in the Information Technology field for 15 years before making a career change. Since transitioning to the field of income tax in 2003, she has prepared and analyzed hundreds of tax returns. Rhonda enjoys helping taxpayers and tax professionals learn and understand the fascinating world of income taxes. Currently, she is the Learning and Development Manager.


 

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