We bought my father in law's house from him so that he could pay for in-home care in his final years. He continued to live there until his death, rent free.

[jeremyhgrand]

We bought my father in law's house in Puerto Rico from him in 2009 so that he would have the resources to pay for in-home care in his final years.  He continued to live there until his death, rent free. We sold the house in 2017 for a small net loss.  I understand that 2nd homes are not deductible, but in some sense this is not a 2nd home.  What is the deductibility?

[Hal_Al · Accepted solution]

What you describe is a 2nd home; a home you own, occupied by a relative, rent free. None of the loss is deductible.