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meera1
New Member

I bought a rental property in a foreign country in 2008. I have paid 50%. Till 2020 builder has not delivered and gone bankrupt. Where can I claim the Loss of 50%

 
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5 Replies
MaryK4
Expert Alumni

I bought a rental property in a foreign country in 2008. I have paid 50%. Till 2020 builder has not delivered and gone bankrupt. Where can I claim the Loss of 50%

You can enter under Stock, Bonds, Mutual Funds, Other under Investments.  See Solved: I invested in a business that failed, can I write ...

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Carl
Level 15

I bought a rental property in a foreign country in 2008. I have paid 50%. Till 2020 builder has not delivered and gone bankrupt. Where can I claim the Loss of 50%

Looks to me like @MaryK4 may be making some assumptions, and chances are those assumptions may be flat out wrong too.

Actually, more clarification is needed. Did you purchase an actual existing rentable structure? Or did you just purchase land and then paid a builder to build on it? You "may" be able to report this as an investment loss. But based on the information provided (or lack thereof) I don't see any loss yet that would qualify to be claimed as such on any tax return. So you really need to provide more clarification so we can ensure you report things correctly and not end up getting audited 24-36 months after filing.

For example, you purchased land at a point in time. Then later you contracted and paid 50% down to have a structure built on it and that structure was never built because the builder went bankrupt. You still have ownership of the land so there's no loss to be claimed yet....but that depends on the specifics. Generally, you can't claim losses on an investment until the tax year you sell that investment - and only if you sell it at a loss of course.

 

meera1
New Member

I bought a rental property in a foreign country in 2008. I have paid 50%. Till 2020 builder has not delivered and gone bankrupt. Where can I claim the Loss of 50%

Hi,

 

This is a 18 Floor Condo Hotel. The builder has taken 50% based on construction. In other words the superstructure is done. This was completed about 10 years ago. After that nothing has happened. The site is abandoned. Glad to provide any further info.

 

Thanks 

meera1
New Member

I bought a rental property in a foreign country in 2008. I have paid 50%. Till 2020 builder has not delivered and gone bankrupt. Where can I claim the Loss of 50%

Hi Carl,

 

Do you need any further info?

 

Mary, What do you think

Carl
Level 15

I bought a rental property in a foreign country in 2008. I have paid 50%. Till 2020 builder has not delivered and gone bankrupt. Where can I claim the Loss of 50%

All I can say for sure is that nothing concerning this is reported on SCH E or anywhere in the Rental & Royalty Income (SCH E) section of the program. This sounds more to me like an investment loss that would be reported as such in the Investments section. Overall though, since it's been 10 years or more since your initial "investment" of 50% down, it would probably be in your best interest to seek professional help on this, since it's been abandoned so long. Especially if your state also taxes personal income.

My imagination runs wild on this, wondering why you wait to deal with this 10 years after the initial investment. Therefore I wouldn't expect the IRS to wonder either .... I would expect them to question you on all this with an audit. So that's why I believe local one-on-one face-to-face professional help would be your best and safest action at this point.

 

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