We bought a plot of land with the thought of building a retirement home on it. We have changed plans and are now thinking of selling the land. Would we report the gain or loss as investment income?
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Yes, you would report the sale of the plot of land as an investment sale. Any gains would be taxable as capital gains. Capital losses cannot be deductible on personal use property.
Please read this TurboTax answer to a similar question for more information.
Thanks. What is the rationale behind taxing gains but not allowing losses? It seems lopsided.
That's the way the IRS has written the law. The property is personal use. There are no losses allowed on the sale of personal use property.
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