Jax Tax : Assuming you properly reported the sale by including the assumption of debt as sales proceeds against your basis, you may.
Jax Tax : The Max amount you could take is the lower of the taxable capital gain reported or $25,000.
Jax Tax : If you had a profit but qualified under sec 121 not to be taxed, you cannot take any deduction because you got the profit tax free.
Jax Tax : If you had no profit, you cannot take the loss if it was a personal residence because losses on personal residences is not allowed.
I no longer have the tax records from the sale of that home. I do remember the transaction was with a realtor of the new home where I agreed to purchase the new home if the realtor would take the trade of my old home for the new home. The realtor agreed and then sold the home to the new buyer and got my consent to take over my VA loan. I don't remember if there were capital gains or not, it was a unique transaction. Was there a law on capital gains for personal residence 25 years ago?
Jax Tax : That is the answer to your question. You have find the records some how. Federal law requires you keep records so long as needed in respect to claiming a loss or deduction. If you can claim it, it is a sch D long term capital loss.
Jax Tax : Maybe the preparer has it. You can use form 4506t to request a copy from the IRS but there is only a small chance they have it.
Jax Tax : Yes, there was tax then.
It seems odd that my having to pay for someone else's bad debt in order to get my benefit back is connected to the sell of the house. The house was actually sold to the realtor and had nothing to do with the realtor's transaction with the new buyer i.e. I did not sell the house to the buyer, the realtor sold it after I traded it. I just allowed the buyer to assume my VA loan. Can you think of any other possible recommendations of pursing a remedy?