Yes, you need to report it. Instructions to report it are below. If you sold a home that you use as a rental or investment property at a loss, you may be able to deduct it as a loss.
- You can figure out if you've got a tax loss by comparing the sale price to your property's tax basis, which includes the original purchase price, improvements, and depreciation deductions.
- If you acquired the property through a Section 1031 like-kind exchange, your tax basis might be lower than expected, which could lead to a gain instead of a loss.
- If your rental property was held for more than a year and you sell it at a loss, it can typically qualify as a Section 1231 loss. This can offset various types of income, like salary and capital gains.
- A significant Section 1231 loss might result in a net operating loss, which you can carry back to offset past taxable income or carry forward to offset future income.
See Selling Real Estate
I sold my rental property. How do I report that?
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