@Jackst68 wrote:
To be honest, I'm having trouble understanding this. Consider, for example:
Consider this:
If you paid $400,000 for your primary home and sold it for $350,000, you would have a loss of $50,000 which you could not deduct since it was real property held for your own personal use.
If, in the same tax year, you also sold a second home (perhaps a home that you used as strictly as a vacation home) that you paid $400,000 for and sold for $450,000, you would have a gain on the sale of $50,000 which would be a taxable (capital) gain.
You could not offset the gain on the sale of your second home with the loss on the sale of your primary residence. It might not seem fair, but that is the federal tax code (which, frankly, is way beyond extreme).
