$3k annual limit vs. other types of income still applies to capital loss portion. Form 4797 is used to report sale, and divide into capital and ordinary income/loss. Details and procedures at
http://www.irs.gov/publications/p544/index.html Note: Buildings are Section 1250 property ...
Form 4797:
http://www.irs.gov/pub/irs-pdf/f4797.pdf Instructions:
http://www.irs.gov/instructions/i4797/index.html
