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Level 1

Is it true that if you sell a property for a loss that the loss can be deducted off your taxes for a period of 5 years?

From what I understand, if I sell my lot that I paid 33,000 for say 3,000 I would be able to take a capital loss of 30,000 prorated over a five year period

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Level 20

Is it true that if you sell a property for a loss that the loss can be deducted off your taxes for a period of 5 years?

Not exactly.  When you have a capital loss, you deduct it against any other capital gains that year, plus you can deduct $3000 more.  So if this is your only investment and you never have other capital gains to be taxed, it will take you 10 years to deduct the loss at $3000 per year. 

4 Replies
Level 20

Is it true that if you sell a property for a loss that the loss can be deducted off your taxes for a period of 5 years?

Was the lot every improved?
Level 20

Is it true that if you sell a property for a loss that the loss can be deducted off your taxes for a period of 5 years?

Not exactly.  When you have a capital loss, you deduct it against any other capital gains that year, plus you can deduct $3000 more.  So if this is your only investment and you never have other capital gains to be taxed, it will take you 10 years to deduct the loss at $3000 per year. 

Level 1

Is it true that if you sell a property for a loss that the loss can be deducted off your taxes for a period of 5 years?

The question is, does he have 10 years? What is the limit on the number of years he can write it off against capital gains?
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Level 20

Is it true that if you sell a property for a loss that the loss can be deducted off your taxes for a period of 5 years?

Until the death of the taxpayer, literally; there is no limit on the number of years a taxpayer can offset capital gains with capital losses (plus $3000 as mentioned in the answer by Opus 17).