Question

Sale of Former Residence for a Loss

Forum|Forum|4 years ago
April 11, 2022
1 reply
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Taxpayer moved from the property several years ago, but continued to own the property. The hope was to make improvements and sell the property for an investment gain. After awhile the taxpayer in 2021 decided to sell the property for a loss. Since the taxpayer didn't live in the house when sold, are they able to take an investment loss on the sale?

Carl11_2

Employee

Unless you have more supporting information to provide, more than likely no, as the property would be considered a 2nd home. If the property was sold at a loss, then personal losses are not allowed and nothing has to be reported on the tax return. HOWEVER - If a 1099-S was received by the seller (which I doubt since the property was sold at a loss) then reporting is required weather sold at loss or gain.