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I WAS FORCED TO DROP THE ASKING PRICE MANY TIMES TO just to INDUCE OFFERS), will I be able to claim any or all of that difference as a capaital losss. I beleive the Roy Lewis answer is saying there is no way I can use the 175K as a basis for loss calculation. Too bad as so many of us are in the same boat and much worse than I.
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IMHO

2 strikes against you

1 - the FMV has decreased substantially from the time of your purchase until you convert to a rental property.

2 - the length of time you are renting... IIRC, a rental period of one year is sometimes viewed by the Service as indicative of your intention to turn the property into a rental property.

This is one of those areas in which each individual case is viewed from its own set of facts and circumstances.


Pete
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