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jacksprat62
New Member

Sold a home we were not living in, owed more on the house than we sold it for, how should this be reported? Would it be a loss, sold for 124,000. App at 140, owed 159

 
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MichaelL1
Level 15

Sold a home we were not living in, owed more on the house than we sold it for, how should this be reported? Would it be a loss, sold for 124,000. App at 140, owed 159

The loss on a personal residence or a 2nd home is not deductible on your return.

The mortgage amount does not determine the loss however.

You take the sales price less sales expenses (commissions, closing costs, etc.)

Then the cost of house sold, plus cost of improvements made over the years owned, is the adjusted cost or basis of the house sold. 

The difference in these two (Sales price less adjusted basis in the house) determines the gain or loss. 

View solution in original post

3 Replies
MichaelL1
Level 15

Sold a home we were not living in, owed more on the house than we sold it for, how should this be reported? Would it be a loss, sold for 124,000. App at 140, owed 159

Is this a personal residence that you lived in more than 2 years of the past 5 years?
jacksprat62
New Member

Sold a home we were not living in, owed more on the house than we sold it for, how should this be reported? Would it be a loss, sold for 124,000. App at 140, owed 159

no it was the home we raised children in
MichaelL1
Level 15

Sold a home we were not living in, owed more on the house than we sold it for, how should this be reported? Would it be a loss, sold for 124,000. App at 140, owed 159

The loss on a personal residence or a 2nd home is not deductible on your return.

The mortgage amount does not determine the loss however.

You take the sales price less sales expenses (commissions, closing costs, etc.)

Then the cost of house sold, plus cost of improvements made over the years owned, is the adjusted cost or basis of the house sold. 

The difference in these two (Sales price less adjusted basis in the house) determines the gain or loss. 

View solution in original post

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