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Stephen G.
Stephen G., Financial Advisor
Category: Capital Gains and Losses
Satisfied Customers: 6466
Experience:  Senior Tax Expert; CPA/PFS(retired)Personal Financial Planner; Small Business & Professional Mergers & Acquisitions
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I bought a lake house in 2005 as a vacation home, actually a

Customer Question

I bought a lake house in 2005 as a vacation home, actually a mobile home. I financed it for $150K and added a dock, boat lift, new septic system and furniture. I sold it for $124K in August, 2015 so I lost over $45K and at closing to pay the note off I had to write a check for $16K to pay off the bank.
I don't know whether I can take the loss or have to pay taxes on the $125K?
Braking even would be fine but I am retired and certainly don't have the ability to pay taxes on $125k if treated as ordinary income.
Submitted: 11 months ago.
Category: Capital Gains and Losses
Expert:  Stephen G. replied 11 months ago.

No. If there was no gain on the sale, there would be no income tax due.

The transaction would be reportable on your tax return but the loss that would be shown on Form 8949 (which is the Schedule D sub-schedule).

You didn't indicate what you actually paid for the mobile home, but that amount plus what you paid for any improvements, (excluding any of your own labor), would be your actual tax basis.

The financing doesn't enter into the transaction in terms of computing the gain or loss.

With personal property such as a vacation home, the tax law taxes capital gains, but capital losses are not deductible.

Steve G.