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Question

Family member filed 2007 1040 without claiming loss of $24,000. in a luxury townhouse investment. The reason is that developer couldn't sell & slashed $110,000 from ea. home. Developer's decision changed the reason why investor wanted to invest in this new & exclusive neighborhood in Boynton Beach, FL. Wrote to Developer to get out of agreement, but was told at this stage of the game he could not back out, although this price change was not expected by the buyers. Has document from developer stating the amount with explanation as to no refund for missing closing date. . Can he amend his return?

Submitted: 402 days and 10 hours ago.
Category: Tax
Value: $15
Status: CLOSED

Accepted Answer

Dear XXXXXXXXX,

 

He can amend his return using form 1040X. He would report this loss on Scheduel D.

 

The problem you will have is if the IRS questions this, to prove that this is not a personal use property and personal loss.

 

You should list this loss on scheduel A, and it is limited to the amount in excess of 2 pecent of your adjusted gross income

 

 

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Expert: Ed Johnson
Pos. Feedback: 99.2 %
Accepts: 
Answered: 10/17/2008

Tax Preparer

GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee

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