I have a 2nd home I purchased for a family member. The home burned and was badly damaged. Insurance payment will result in a capital gain based since it is for more than what I purchased the home for. If I sell the property for a loss as compared to the value when I purchased it - can I claim both the capital gain from the insurance payment and the losses from the sale of the property?
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Unfortunately, things don't work that way. You will pay taxes on any gain realized from the insurance payout. Just keep in mind that taxable gain will only be the amount of the payout that exceeds your cost basis.
As for the losses, that's not going to happen unfortunately. Losses on the sale of personal property are not deductible.
How do I enter the capital gain in Turbo Tax for the 2nd home that was burned? Which form?
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