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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I have a house in Baltimore, MD that I bought as an ...

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I have a house in Baltimore, MD that I bought as an investment. As the real estate market has crashed this has not worked out very well. I bought the house in October, 2006 and it has been rented for all but three months of that time. If I sell this property at a loss what am I able to write off on my taxes. I have losses reported on my 2006 and 2007 returns for this property but I was not able to deduct them since my income exceedes $150,000.
Submitted: 9 years ago.
Category: Tax
Expert:  RD replied 9 years ago.

If you sell the property and you have an overall loss, you will be able to deduct the entire loss and the loss that you have carried forward from 2006 and 2007 tax returns irrespective of your income.

The passive loss limitation rule does not apply when you sell the property and so the entire loss is deductible as ordinary loss.

Let me know if you have any question.


Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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