@MD50 If the property was originally purchased to " build our home", then the IRS may consider it to be personal use property. not investment property, and the loss is not deductible. See other replies above and this Reference:
https://www.washingtonpost.com/business/2020/01/15/writing-off-loss-sale-property-federal-income-tax...
That said, I'm of the opinion that once you made a decision not to build, and kept the property, the property was converted to investment property and a loss is allowed. But the amount of the deductible loss may not be your actual loss. For your cost basis, you must use the lower of your actual cost or the fair market value (FMV) on the date of conversion. Using an example: you bought a vacant lot in 2001 for $10,000. In 2005 the property was worth $8000 when you decided not to build. In 2020 you sold it for $7000. Your capital loss is $1000 (8000-7000), not $3000 (10,000-7000).
@TomYoung @TaxGuyBill @Carl Comments?
