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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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I got married in January 2010. I own a home in Schenectady

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I got married in January 2010. I own a home in Schenectady NY. My wife owns a home in Clifton Park NY and I have since moved in with her. I now want to sell the Schenectady home but will end up losing money on the sale. Not only on real estate costs, but the house will probably sell for less than is owed. I make around $165,000 per year. My wife makes around $60,000 per year. In order to close the deal on the house, we will probably have to sell some securities (not 401K or retirement money) to raise the cash. So we will have capital gains on the sale of the stock. The balance of the mortgage is $191,000. We will probably sell in the range of 175,000 - 185,000. Closing costs are estimated at $12,000.
So the question is, what is deductible and over what period?
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

Hello JA Customer,


You really have no deductible expenses here for tax purposes. I assume that the home you have in Schenectady was used as your personal home and is not a rental or investment property. If that is the case, then you can never deduct any losses you realize on the sale of a personal property. The only time that losses on the sale of property can be utilized as a tax deduction is on investment property which was held to produce income.


If you sell stocks and/or bonds held in a regular broker account (not retirement), then you would owe capital gains tax on any gain you had from the sales. If you actually sell those stocks or bonds at a loss, then of course you report those as capital losses on your return. Capital losses can be used to offset capital gains you have in the same year. If your have no capital gains to offset or if the losses are more than the gains, you can only deduct up to $3,000 of the additional losses against your ordinary income. The remaining losses are carried forward and used on future year returns.


I am sorry I could not give you a more favorable answer which would have allowed you some options to deduct your losses from this sale, but the IRS has never allowed the deduction of losses on the sale of a personal property.


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Thank you JA Customer



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