Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification
i have a tax question on deductibility of tax losses
for the past 9 years, have been engaged in the home development business , whereby i would buy land, knock down old houses and build high end homes
the last home i build cost 1,000,000 for land, plus 1,500,000 cost of construction
this home was sold at a loss for 1,900000
the loss was $600,000
i am also engaged in another business as a SEC investment advisor which gives off income
i am alos a CPA
my quaestion is how much of the loss can be offset against my ordinary income
I will opt out and have another tax attorney provide you with the proper analysis
okay hold long will this take
what is the deal ?
Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.
As a developer selling a home which has NOT served as your primary residence, the loss will be reported on Schedule C since it is the normal business in which you are engaged. Accordingly, the entire loss can be used to offset your normal income. If there is any left over that can be carried forward as a Net Operating Loss (NOL) deduction to the following year. This is not a capital gain/loss transaction since it is a normal part of the activity of an existing operating business.