I had a rental property for 10 years that I NEVER lived in that had a short sale last year. Can I take this as a business deduction or must I take it as a personal one?

[CathiM · Accepted solution]

If you continued to use it as a rental property until it was sold, you can take the loss (if there is one) on Form 4797 Line 14 of your 1040.  If you stopped renting it and converted it to an investment property, you can enter it as a sales of investment on Schedule D (Line 13 of your 1040). Your losses are limited to $3,000 a year on Schedule D, but the unused loss carries forward to next year.