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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13143
Experience:  15years with H & R Block. Divisional leader, Instructor
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I sold a 2nd home that I had bought a few years ago I will

Customer Question

I sold a 2nd home that I had bought a few years ago I will be getting a 1099 for $45,000 ---I never lived there---I bought the home for $40,000 and put over $10,000 in upgrades to it so in reality I ended up with a $5,000 loss--- my question is will I have to pay taxes on the entire $45,000??
Submitted: 4 months ago.
Category: Tax
Expert:  Robin D. replied 4 months ago.


No, you would only pay tax on the gain. If you sold for less than your cost (purchase plus improvements) you would not pay tax.

You still need to report the sale, to show that you did have a loss.

If you never used the property for personal purposes, you can apply the loss to other gains then (if you have loss left over) you can apply $3000 of loss to other income (like wages).

If you still have loss left over you can carry that forward till used up.

You will report on form 8949 and Schedule D.

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