Capital Loss question

[piercemichaelr]

In 2018 we purchase as an investment and place to live for a family member a small house.  As the rent paid was less than market, we reported it all as income without deducting expenses.  The house was sold in 2020 at a significant capital  loss.   Can this  be reported and deducted  as a long term capital loss ?

Thank you

[MarilynG1]

Renting to a family member at below-market rent is considered 'personal use'.

Report it as the sale of a Second Home.  You won't be able to claim a Capital Loss, as it is considered personal use property.

Click this link for info on Sale of Second Home. 

Hopefully you deducted expenses such as Mortgage Interest and Property Tax on Schedule A. 

This link has more info on Renting to Family Member. 

[piercemichaelr]

That's what I expected 

Thank you