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Level 1
posted Nov 16, 2022 9:26:32 AM

can I use loss carry forward to offset capital gain from sale of second home?

I sold 2 homes in 2022 and realized a large capital gain on the sale of my second home. Can I use a loss carry forward from prior years to offset the gain?

1 1 706
1 Best answer
Expert Alumni
Nov 16, 2022 11:09:44 AM

Yes, you can use the capital loss carryover against the capital gain on the sale of the second house.

Review the basis of the second home.   It should be the cost to buy the home including the costs of ensuring that the deed was properly registered.   You should try to find the HUD1 document that was produced at the time of the purchase.   Also, add any capital improvements you made over the years.   This will be your adjusted basis.   Then you apply the capital loss carryover to reduce the gain.

1 Replies
Expert Alumni
Nov 16, 2022 11:09:44 AM

Yes, you can use the capital loss carryover against the capital gain on the sale of the second house.

Review the basis of the second home.   It should be the cost to buy the home including the costs of ensuring that the deed was properly registered.   You should try to find the HUD1 document that was produced at the time of the purchase.   Also, add any capital improvements you made over the years.   This will be your adjusted basis.   Then you apply the capital loss carryover to reduce the gain.