I am selling a house right now and I'm taking a huge hit on the sale. I'm basically selling it for $45,000 less than I bought it for AND I put in about $30,000 of improvements finishing the basement.
A loss on the sale of a personal residence can not - to the best of my knowledge - be deducted on income taxes.
However, a funny thing happened - I was talking to my brother who is a financial planner in training. He was talking to his boss about my home sale and because I keep an office at home and do quite a bit of work there there may be a way to deduct part of the loss if I have capital gains this year from other sources.
I have routinely claimed the office portion of the house for years as a write-off so that is well defined. As far as the rest of it - does anyone know if there's truth in it? It was be VERY nice to be able to use even part of that as a deduction.
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