Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.
Good afternoon. Your taxable gain or loss would be based upon the sale price less your basis in the property. Your basis is your purchase price plus improvements. So, as you reference, you have a loss of $105,000 less $125,000 = $20,000 loss. The IRS does not allow you to deduct a loss on the sale of a primary residence, but there would be no tax
impact on your net proceeds of $44,000. That would be simply a return of your investment and not subject to any tax.
I wish I could tell you the loss was deductible, but I can only provide you information based on the law
so that you can act on the best available information to you. ………..I wish I had better news, but can only hope you recognize and understand my predicament and don't shoot the messenger. I'm sorry!
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