I sold vacant land (at a loss) that I owned for 18 years. I don't get any "loss credit"? Thought I would get $3,000.00

[tammysoccer]

My loss was 12,000.

[TaxGuyBill]

Did you ever use the land for personal use?

[tammysoccer]

Well..... it was land.  It had no real "use".  It sat there.  Waiting for something to be built on it.  And never did.  But basically yes, I would call that personal use.

[TomYoung]

How did you enter the sale?  Using the "Stocks, Mutual Funds, Bonds, Other" interview and telling TurboTax that you didn't receive a 1099-B?  And then selecting "Land" as what was sold?  That would place the $12,000 loss on Form 8949, and that loss, along with any others for that particular "sales category" would transfer to Schedule D to be netted against other gains.  Only if you still had a loss would you get the loss - on line 13 of your Form 1040, not down in the "tax credits" area - up to the $3,000 limit.

Follow the number flow.

[TaxGuyBill]

Losses are not allowed for personal-use items.  Unless you can prove that you bought it exclusively for business, rental, or investment use and never used it personally or had personal intentions for the property, the loss is not deductible.

[TomYoung]

As you've described it, your use was not "personal."

[tammysoccer]

ok.  TomYoung asked a bunch of questions and I believe I filled everything out correctly (under Stocks....., selected Land, etc).  When I go back in to "edit".  It changed my "land selection" to "personal item" which I thought was odd....
Anyway, I get it, no deduction.

[TomYoung]

No, change that to land and later in the interview select "other investment purposes."

[tammysoccer]

I understand what you mean TomYoung.  Honestly, my intention was to build a house on it but I never did.  It sat there and I paid taxes and water fees etc.....

[tammysoccer]

I will try that.

[tammysoccer]

It worked!  Got the loss deduction.  Thanks!

[rjs]

But it wasn't an investment property, was it? If you intended to build a house on the land for you to live in, that's personal use, not an investment.

[tammysoccer]

yes, I see your point rj.  I did not have a fully thought out plan on what I was going to do with.  yes, build a house, but not necessarily live in it (full time).  It may have been a second home but I would have probably rented it out (it is located in a ski town,- Park City).  So I think it would be an investment property.

[TaxGuyBill]

A second home, even if rented out for part of the year, is still personal use, which makes it non-deductible.

[Carl]

Basically, treat it as investment property. Otherwise, your loses are not deductible.