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October 13, 2021
Question

Capital loss (1231) not offsetting gain from sale of house

  • October 13, 2021
  • 1 reply
  • 0 views

I have a large K1 capital loss from the sale of a commercial building (which is being called a 1231 loss.)  I also have a large capital gain from sale of my residence.  Shouldn't they be offsetting?  It is still showing the 1231 loss as an unallowable passive loss for this year and not offsetting the capital gain from the sale of my house.

Thanks

    1 reply

    Employee
    October 13, 2021

    Section 1231 gains and losses are netted but, regardless, your loss is going to be suspended until you dispose of your interest.

    cindi11Author
    October 13, 2021

    Not sure what you mean.  The property was sold, which generated the capital loss.  

    Employee
    October 13, 2021

    Yes, except you do not own the property; the entity (you stated you received a K-1) owns the property.