short term gain on sale of rental

[choya]

I bought and sold a commercial rental in 2021, and made substantial short term gains. I also had substantial short term losses in the stock market. Can the rental property gains be offset by the losses, and how is this done on turbotax. When I dispose of the property through turbotax, it does not offset the gain from the loss.

[tagteam · Accepted solution]

Your stock market losses are treated as short-term capital losses.

Your gain on the sale of the rental property is treated as ordinary income since you held the property for one year or less.

As a result, there is no direct, one-for-one, offset (as there would be if both received capital gain treatment). You can only use up to $3,000 ($1,500 if married filing separately) of the stock market losses against all other income.

[Mike9241]

sorry, but holding the property for less than 1-year results in ordinary income, not short-term capital gain. you should see the gain in section II of form 4797. that is transferred to schedule 1 line 4

you can see form 4797 instructions. look at the table line 2 on page 1

IRC section 1231 doesn't apply because the property was held for less than 1 year. 

Https://www.irs.gov/pub/irs-pdf/i4797.pdf