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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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I am contemplating selling an investment property at a

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I am contemplating selling an investment property at a significant loss, in excess of 150K, and would like to know if I am able to claim the entire loss against non passive income in the tax year in which the property will be sold? I am not a Real Estate Professional, or dealer. The title of the property is in the name of my mother and myself.

DearCustomer

When you say investment property do you mean property held for investment?

Do you mean residential rental?

Do you mean commerical rental?

was this a depreciable asset?

Customer: replied 8 years ago.
Reply to Ed Johnson's Post: It is a three family residential property, that was purchased in 2005 that has been depreciated.

Dear cathomas,

Thanks for the additional information.

From what youy have said in your question, you will be able to take all the passive losses this year, and you will be able to carry forward any excess losses in the followon year.

the maximum passive loss is 25,000 for married filling joint returns, and 12,500 for filing seperate returns.

 

Customer: replied 8 years ago.
Ed,

Could you point me to the irs tax publications that indicate this so that I can confirm. Most of the information that I've seen indicates that we can only take a limit of 3,000 per year, which would take more than 60 years to recoup at that rate. Taking a loss of 25,000 per year would definately help, but I'd like to confirm through and irs publication.

Thanks,

I am on the way out the door to a business meeting in Newark, NJ.

I can provide the references to you when I return, if that is ok.

 

Customer: replied 8 years ago.
Yes, that would be OK and appreciated.

Thanks,

Dear Cat,

Thanks for your patience.

This is the IRS link to their description of the passive loss rules.

http://www.irs.gov/businesses/small/article/0,,id=146326,00.html

It also has the publication references at the end of the page.

let me know if you need more.

 

Ed Johnson and 2 other Tax Specialists are ready to help you
Customer: replied 8 years ago.
Ed,

I really appreicate promptness and accuracy on this, it was tremendously helpful. I got a little nervous when I saw the publish date (2004) for the reference you sent, and used it as a basis to see if there was anything else out there more current. I identified the following http://www.irs.gov/publications/p527/index.html published in 2007 which made me feel a bit more comfortable.

Thanks,
   Cecilio Thomas
Customer: replied 8 years ago.
"I really appreciate your promptness... :-)"