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My wife and I lived in a class A motorhome exclusively for

Resolved Question:

My wife and I lived in a class A motorhome exclusively for 3 1/2 years. We had no other residence. We decided to allow it to be voluntarily repossed. We had a deficiency of $97,000 on it.The lender, GEMB, settled for $40,000. Can we claim any of this as a deuction on our 2009 tax return? It was repossed on Jan. 21, 2009
Submitted: 4 years ago.
Category: Tax
Expert:  Merlo replied 4 years ago.

Hello dave,

 

Did you receive a 1099 form from the lender to report the amount of the canceled debt?

 

What exactly are you asking if you can claim?

 

 



Edited by Merlo on 3/1/2010 at 8:40 PM EST
Customer: replied 4 years ago.
No 1099 but I could ask them for one. I am asking if I can use the loss of residence as an income tax deduction in any way.
Expert:  Merlo replied 4 years ago.

Hello again dave,

 

The loss on the sale of a personal residence is never deductible. The only time you can deduct the loss on the sale of property is in the case of investment property, such as an apartment building or home which you rent out.

 

I asked if you received a 1099 form because if you allow a property to be repossessed or foreclosed on, then any debt which the lender cancelled actually becomes taxable income to you, and they can send you a 1099 form to report the amount of the debt which was forgiven. If you had received such a form, you woud have actually had to include this as income rather than claiming it as a deduction.

 

If this was helpful please press the Accept button.

 

Thank you dave

 

 

Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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Merlo
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25+ years tax consulting. Specializing in returns for US citizens living abroad