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Subject:  Re: Loss on real estate sale Date:  8/21/2000  7:50 PM
Author:  TMFTaxes Number:  38962 of 129670

<<Real estate values in my area have declined dramatically. If I sell some buildings at a loss, what can I apply that loss against come tax time?>>

Both answers that you received are basically correct. If you are using the properties purely for investment purposes (like a second or third home), then they are capital assets and those losses can only be used to offset capital gains (plus $3k that you can write off against ordinary income). For more information on this, check out the "netting gains and losses" article in the Taxes FAQ Area.

If they are rental properties, pointed out...the loss is allowed in full on the sale of the property. This is true regardless of if you have any other gains or not.

<<( I was thinking if I did manage to sell the property I could cash in some US Savings bonds and apply the loss against the interest earned on the bonds...but someone told me I couldn't do this.....can I, or can't I)
Any IRS publication where I can look this up? >>

Again, tell us how the property is being used, and we'll be happy to tell you how it's handled for tax purposes.

TMF Taxes

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