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Subject:  Re: Loss on rental house Date:  11/25/2012  1:44 PM
Author:  TMFPMarti Number:  116970 of 127637

Is FMV only used when it is less than the purchase price and upgrades?

Yes, and only when a personal-use property is being converted to rental. It stands to reason since losses on the sale of personal-use property aren't deductible, but losses on purely rental property are. Otherwise one could briefly convert to rental then sell and realize a tax loss largely incurred while it was a personal residence.

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