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CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3820
Experience:  over 40 years experience in tax matters
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hello

Customer Question

hello
Submitted: 5 years ago.
Category: Tax
Expert:  Wallstreet Esq. replied 5 years ago.

Wallstreet Esq. :

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

JACUSTOMER-517hxtes- :

hello

JACUSTOMER-517hxtes- :

i have a tax question on deductibility of tax losses

JACUSTOMER-517hxtes- :

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

JACUSTOMER-517hxtes- :

the last home i build cost 1,000,000 for land, plus 1,500,000 cost of construction

JACUSTOMER-517hxtes- :

this home was sold at a loss for 1,900000

JACUSTOMER-517hxtes- :

the loss was $600,000

JACUSTOMER-517hxtes- :

i am also engaged in another business as a SEC investment advisor which gives off income

JACUSTOMER-517hxtes- :

i am alos a CPA

JACUSTOMER-517hxtes- :

my quaestion is how much of the loss can be offset against my ordinary income

JACUSTOMER-517hxtes- :

hello ?

Wallstreet Esq. :

I will opt out and have another tax attorney provide you with the proper analysis

JACUSTOMER-517hxtes- :

okay hold long will this take

JACUSTOMER-517hxtes- :

what is the deal ?

Expert:  CGCPA replied 5 years ago.

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.

CGCPA, CPA
Category: Tax
Satisfied Customers: 3820
Experience: over 40 years experience in tax matters
CGCPA and other Tax Specialists are ready to help you