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If this was his primary residence, then no, probably not (which I learned the hard way selling a home last year at a $40,000 loss). This is the flip side of the tax breaks you can get from selling a personal residence at a profit -- you get no writeoff for a loss. I'm not aware of any exceptions for hardship or "forced move." (If there is any, I'd love to hear it so I can amend my 2006 return!)

Since he did not live in the house for the 2 out of 5 years, it would appear to me that he may be able to take the loss. Remember, he would have to pay taxes on the gain. At least, he would have no gain to report.

Anyone else have ideas?

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