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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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can i offset the capital gains of a personal residence (gains

Resolved Question:

can i offset the capital gains of a personal residence (gains in excess of 250k exception) with real estate losses from investment property?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello Robbed,

If you actually sold the real estate investment property and have a capital loss, then that loss may be used to offset any excess gain you have from the sale of your primary residence, or any other capital gains which you have for the year.

You may not claim more than $3,000 of net capital losses in any one year. In other words, if your capital gains were $100,000 and your capital losses were $120,000, you could only claim a $3,000 deduction. The remaining loss of $17,000 is carried forward and deducted on future tax returns, again with a maximum allowable net loss in any one year of $3,000.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you Rob.

Customer: replied 7 years ago.
Can prior year carry over capital losses be used to offset the primary residence gain as well?
Expert:  Merlo replied 7 years ago.
Hello again Robbed,

Yes, absolutely they can.

The same rules still apply as far as not being able to actually claim more than a $3,000 net loss in any one year.

But you can certainly use any prior year carry over losses to help offset any gain you had on the sale of your residence.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you Robbed.

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