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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55323
Experience:  29 years of experience as a tax, real estate, and business attorney.
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1. Purchased Property for 99K. 2. Made improvements

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1. Purchased Property for 99K.

2. Made improvements worth 26K.

3. Sold for 105K, with total expenses (mortgage payoff etc,) for 61k.

4. Net Proceeds from sale: 44K

5. The Property in question was until last year used as the Primary Residence.

I sold the property for a loss. How is the Net Proceeds considered in this Scenario?
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!

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!
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Customer: replied 4 years ago.

Thank you for taking your time to answer my question. I am very impressed with the response time. In future I will for sure wont hesitate to contact you. Thank you and have a great day.

Thank you so much for the kind words. I'll be here if you need me! You're very's my pleasure to be able to help!

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