Hello again solsurf,
Even though this was a foreclosure, for reporting purposes on your tax
return it will be reported as a sale. The sale is reported on Schedule D.
You will report the sales price as being $481,390 which is what they show to be the fair market value. You will then report your basis in the home of $286,000. That will give you a gain of $195,000. However, since this was your primary residence, and since you owned and lived in the home for 2 of the past 5 years, you may exclude $250,000 from your gain (or $500,000 if you are married filing a joint return). When you claim your exclusion of $250,000 or $500,000, then you have no gain at all and you actually have a loss.
Losses on a personal residence do not qualify for a tax deduction
, but you will have no taxable gain to worry about.
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