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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Dave Du Val, EA

Dave Du Val, EA
Chief Compliance Officer for TRI Holdco

Dave Du Val, EA, is Chief Compliance Officer for TRI Holdco. Inc., the parent company of TaxAudit, and Centenal Tax Group. A nationally recognized speaker and educator, Dave is well known for his high energy and dynamic presentation style. He is a frequent and popular guest speaker for the California Society of Tax Consultants, the California Society of Enrolled Agents and the National Association of Tax Professionals. Dave frequently contributes tax tips and information to news publications, including US News and World Report, USA Today, and CPA Practice Advisor. Dave is an Enrolled Agent who has prepared thousands of returns during his career and has trained and mentored hundreds of tax professionals. He is a member of the National Association of Tax Professionals, the National Association of Enrolled Agents and the California Society of Enrolled Agents. Dave also holds a Master of Arts in Education and has been educating people since 1972.

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