Instead of deducting them on the Sch A you can just add that to the cost of closing on the sale of the home on the Sch D.
But I am told that losses on non-investment property are not deductible so how does that help me? Also, I am led to believe that I would be limited to $3000 per year if they would be deductible. Our share of these taxes is $35K. Can I deduct them in one year and get the benefit?
Ok ... you can take the loss on an inherited property but it is subject to the limitation . Since you have a loss then you do have the option to deduct them on the Sch A instead ... keep good records in case the IRS was to question the deduction.
Thanks. I have the closing statement that lists the entry as deferred real estate taxes. How do I deduct any of the loss? TurboTax tells me that losses on my property are not deductible since it is not investment property and wipes the losses to zero. Also, I don't see where I can add closing costs. It asks me for the proceeds which would be the 1099 S amounts and it asks for the FMV. It never asks for closing costs.
It is investment property if you didn't live in it as a personal residence. And after it asks for the sales price the cost of sale & basis is asked for.... follow the interview screen carefully.
Sorry. One last question. Just verifying that taking the option as investment on this property I can still take the schedule A deduction provided I have the documentation? I was the only property I owned at the time.