Legal Question in Real Estate Law in California

Real Estate Tax Question

Need to relocate due to work. Will need to sell our home in Laguna Niguel, CA for about $150,000 - $200,000 less than we paid for it. Will this be able to be wrote of as a loss on our 08 taxes?


Asked on 4/27/08, 12:16 am

2 Answers from Attorneys
Mitchell Roth MW Roth, Professional Law Corporation

Re: Real Estate Tax Question

Yes you will have a $150k capital loss.

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Answered on 4/27/08, 9:28 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Real Estate Tax Question

You will be reporting the transaction in the years the sale actually closes, let's hope 2008.

IRS Publication 523 describes in some detail how to calculae and report your loss.

Note that it will be reported as a capital loss and capital losses have peculiar and unpredictible effects on reducing taxable income and taxes due for families with most income from regular (active) sources. If the impact on your taxes is important to predict in advance, either see a tax consultant or do a dry run with the current edition of software like TurboTax to see what happens under assumed values of selling price, etc. Be sure to read IRS Pub. 523 first.

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Answered on 4/27/08, 4:20 pm


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