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Financial Planning / Tax Strategies
|Subject: Re: reporting sale of inherited house||Date: 1/1/2002 7:15 PM|
|Author: angelbuggy||Number: 56584 of 119697|
(And IIRC, you couldn't use the loss to adjust the basis of a new house in the early 1980's; only a gain.)
When I spoke to the IRS about it at the time, they informed me that my loss could be added to the basis of a replacement home so that any gain on that house would be lowered by the loss on the previous home. The tax theory was the same as rolling your gains into your new house and lowering the basis, and delaying all tax impact until you sold a house and didn't replace it within the allowed time limit. Of course, now everything is different and a large part of your capital gain is tax-free, anyway.
Anyway, the IRS is certainly known for its less-than-stellar help, so it's certainly possible I was told something that was incorrect. Since I wasn't able to afford a house here for several more years, it didn't matter, anyway. But that incident is why I was confused about the value of this loss currently.
Thanks again for clarifying.
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