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 Lev Your Own Question
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

If my home depreciated $50,000.00, due to the economy, is that

Customer Question

If my home depreciated $50,000.00, due to the economy, is that a tax deduction? We live in Phx Az, the housing market here has placed us in an UNDERWATER capacity, is this a tax deductable loss? We paid $150,000.00 in 2008 for the home, it is now valued at 85 to 90k, which is a tremendous loss to us, would this loss be tax deductable or any part of it? Are there any programs available that addresses this situation?
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.
Hi and welcome to Just Answer!
Sorry for your situation...
First of all the loss is only recognized if the property is sold.
If the value of the property is changed, but you keep the property - no gain or loss is recognized.
You will be able to deduct your loss only if that is a business or income producing property - for instance - a rental property.
If that is your personal property - you may not deduct the loss on your tax return.
You might be able to negotiate with the mortgage company to forgive part of your mortgage due to the market change. The amount of debt forgiven is reportable on 1099-C - - generally is taxable, unless any exemption could be used.The Mortgage Forgiveness Debt Relief Act of 2007 allows for federal tax purposes an exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
Sorry if you expected a different answer.
Let me know if you need any help or clarification.