Claim capital loss for sale of property

[taxedout1234]

[Removed]

[tagteam]

That would be kind of a stretch and it's entirely up to you if you want to risk it.

[Mike9241]

if you're going to report the sale as a rental property, since it is now business property the loss is ordinary not capital.   the sales price and cost flow to form 4797 and from there to schedule 1 line 4 - not to schedule D

as a personal residence the loss is not deductible.

on schedule E you have to report days rented at fair value which if you never rent it would be 0

whether this reporting would create a red flag in the IRS computers is unknown. 

[tagteam]

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@Mike9241 wrote:

on schedule E you have to report days rented at fair value which if you never rent it would be 0

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I agree and that's the problem with this scenario (i.e., IRS will see the property being purchased in June and then, likely, sold months later with an ordinary loss on Form 4797 and zero income from rental use). 

Further, TurboTax will not accept an entry of 0 days rented at FMV on Schedule E. 

[taxedout1234]

Thank you for your answers. Sounds like it's best to get a CPA for this kind of scenario?

[tagteam]

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@taxedout1234 wrote:

Thank you for your answers. Sounds like it's best to get a CPA for this kind of scenario?

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You are welcome and that would not be a bad idea.