fredazcpa Posted March 20, 2016 Report Share Posted March 20, 2016 Tax payer bought home for $252,000 in 2006, then turn into rental in 2009, FMV at that time was 136,000 Depreciation was based on that number. fast forward to 2015, sells the rental for $191,000, with the improvements, etc the loss works out to $50,000. Is this a long term Capital loss?, or does the loss remain a personal loss like you would have if you sold your personal res. thank you in advance for your help Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 20, 2016 Report Share Posted March 20, 2016 Once it TRULY became rental property it loses all 'personal residence' characteristics, both pro and con. So if sold at a profit, you know that the gain exclusion would not apply. Same thing for a loss. So yes, it's a LTCL. Now, if they 'converted' it three months before the sale, no doubt the IRS would argue, rightly, that this was a ploy to convert a personal loss to a deductible one. But not when it was a rental for 7 years ! Quote Link to comment Share on other sites More sharing options...
fredazcpa Posted March 20, 2016 Author Report Share Posted March 20, 2016 Thank you 1 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted March 21, 2016 Report Share Posted March 21, 2016 As KC said, it is a LTCL Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.