How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Anne Your Own Question

Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1782
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
5242771
Type Your Tax Question Here...
Anne is online now
A new question is answered every 9 seconds

I had a 50% long term interest in real estate with an "at risk"

Customer Question

I had a 50% long term interest in real estate with an "at risk" basis of $280,000 that was sold in 2012 for a net long term gain of $1,100,000. We also had a cumulative operating loss of $1,000,000 in the senior housing facility that had a lease on the property. My interest in the operating facility was terminated upon sale of the real estate.

Can my operating loss for the senior housing facility be offset against the property?
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.
Hi

Thank you for using justanswer.

If you have unallowed losses every year that you own a rental property, you can take a deduction for all of the loss that you carried forward in the year that you sell the property. For example, if you have unallowed losses for five years, you can deduct all five years' worth of losses if you sell the rental property within the last year. There is no limitation on how many years you may carry your losses forward as of July 2011
Please see page 10 of 2011 Publication 925 for more in depth information.

I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.


Customer: replied 1 year ago.

I am not certain that my question was clearly described. I (believe I know} that the losses on the real estate were limited to the "at risk" exposure. I have a tax basis of $280,000 for the real estate. My taxable gain on the real estate was $$820,000. However, I also had more than $1,000,000 loss on operations. If you are saying that the "unallowed" losses from operations are also treated as deductible up to the full amount of those losses, then, based my predictable income from other sources will be free of income tax for the remainder of my expected life time (I am 79 years of age) and I would be happy to send you a nice bonus relative to my local tax consultant. Otherwise, I must sign a substantial check to our friends at IRS.


 


Pending my reading of Publication, I will consider a favorable response to my question.


 


Thanks for your courtesy and prompt response.


 


Jack Sullivan


 

Expert:  Anne replied 1 year ago.
If you look at page 2 of http://www.irs.gov/pub/irs-pdf/i6198.pdf, specifically under the instructions for lines 2a, 2b, and 2c, it tells you to "combine long term and short term capital gains and losses and ordinary gains and losses from the sale or other disposition of activivities."

It goes on the say "Enter gains and losses without regard to the at risk limitations, the limitations of capital losses , or the passive activity limitations. "

This is because in the year of sale, passive losses that you have been carrying over from year to year due to income limitations , now become fully deductible as non passive losses in the year of sale.

I hope this helps.
Customer: replied 1 year ago.

I cannot locate the file http://www.irs.gov/pub/irs-pdf/16198.pdf.


I have searched BING and GOOGLE CHROME. Am I missing something?

Expert:  Anne replied 1 year ago.

Hi Jack

No , I don't think you're doing anything wrong. I normally include 2 different ways to get to the information. One way is the address that I gave you. Here's the other:

Instruction 6198 (Rev. November 2009)

The information that you want starts on page 2 of the right had side, and again its concerning line 2.

Please let me know if you have any other concerns or questions, and I apologize for not giving you both options in my previous answer.

Expert:  Anne replied 1 year ago.
Just checking back in with you to see if the other link worked and if you had any other questions. Again, in the year of sale,. the previously unallowed losses due to basis or passive activity become non passive losses for the year of disposition, allowing you to take these losses in full

Please let me know if you have any follow up questions.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.