Any help for forced to sell rental due to Covid renters wouldn't pay rent even though they didn't qualify for Covid relief

[Breez313]

I hope someone can help.  We had a second home that we rented out to some supposed friends instead of selling it when they literally begged us to do so.  They refused to pay rent for several months and claimed it was because they didn't have to because of Covid.  They didn't qualify for rental relief programs because they were still working in the jobs they had prior to Covid, etc.  They just didn't want to pay the rent.  They also caused significant damage to the home by not watering the landscape, putting holes in the fence, breaking the gate,  putting holes in the deck.  They even stole the washer and dryer that we had on the property and numerous tools and items from our shed.  I called the police, but they wouldn't do anything other than take an incident report over the phone because of Covid and said they don't get involved in tenant issues.  Since they didn't qualify for Covid rental relief, we were unable to get rental relief payments for property owners and had to sell our home way under market to a flipper and paid them to move out.  The only other alternative was to try to pay two mortgages which would have depleted our finances.   We did have a profit from what we paid for the home, but it was sold at $150-200k below its value because we couldn't keep paying the mortgage with no rental income.   I am wondering if there is tax relief for this type situation?  

[Vanessa A]

No, there is not specific tax relief for basically what comes down to having bad tenants.  You can deduct damages as rental expenses if you paid for repairs or to replace the items they destroyed or stole for the rental property. Since you still profited on the sale, there are no tax breaks for selling the property.

If they stole personal property that was in a shed, you cannot deduct those losses, even if you replaced them as they are personal casualty and theft losses which are not deductible.

[AmeliesUncle]

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@Breez313 wrote:

We did have a profit from what we paid for the home, but it was sold at $150-200k below its value because we couldn't keep paying the mortgage with no rental income.   I am wondering if there is tax relief for this type situation?  

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Because you sold it for less than what you could have sold it for under ideal circumstances, your taxable profit will be less.  Because your profit is less, there will likely be less tax.