Section 165(c) of the United States Internal Revenue Code limits losses that taxpayers can deduct into three categories: business or trade losses, investment losses, and losses incurred from casualty or theft. A loss incurred by a taxpayer from the sale of the taxpayer's personal residential property is not deductible. Personal residential property losses do not fit under any of the enumerated categories under Internal Revenue Code section 165(c). Furthermore, Income Tax Treasury Regulation section 1.165-9 states that a loss sustained on the sale of residential property purchased or constructed by the taxpayer for use as his personal residence and so used by him up to the time of the sale is not deductible under Internal Revenue Code section 165(a).
However, if, prior to the sale of the personal residence, the taxpayer converts the residential property into a rental property, a loss sustained on the sale of the property will be deductible under Internal Revenue Code section 165(c)(2). To calculate the loss on residential property that was converted into a rental, prior to the sale of the property, Treasury Regulation section 1.165-9(2) states that the basis of the property will be the lesser of either the fair market value at the time of conversion or the adjusted basis determined under Treasury Regulation section 1.1011-1.
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Tax law on the sale of inherited property is not settled.
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loss, sale, residential, property, this, article, multiple, issues, please, help, improve, discuss, these, issues, talk, page, learn, when, remove, these, template, messages, this, article, does, cite, sources, please, help, improve, this, article, adding, cit. This article has multiple issues Please help improve it or discuss these issues on the talk page Learn how and when to remove these template messages This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Loss on sale of residential property news newspapers books scholar JSTOR May 2012 Learn how and when to remove this template message The topic of this article may not meet Wikipedia s general notability guideline Please help to demonstrate the notability of the topic by citing reliable secondary sources that are independent of the topic and provide significant coverage of it beyond a mere trivial mention If notability cannot be shown the article is likely to be merged redirected or deleted Find sources Loss on sale of residential property news newspapers books scholar JSTOR May 2012 Learn how and when to remove this template message The examples and perspective in this article may not represent a worldwide view of the subject You may improve this article discuss the issue on the talk page or create a new article as appropriate May 2012 Learn how and when to remove this template message Learn how and when to remove this template message Section 165 c of the United States Internal Revenue Code limits losses that taxpayers can deduct into three categories business or trade losses investment losses and losses incurred from casualty or theft A loss incurred by a taxpayer from the sale of the taxpayer s personal residential property is not deductible Personal residential property losses do not fit under any of the enumerated categories under Internal Revenue Code section 165 c Furthermore Income Tax Treasury Regulation section 1 165 9 states that a loss sustained on the sale of residential property purchased or constructed by the taxpayer for use as his personal residence and so used by him up to the time of the sale is not deductible under Internal Revenue Code section 165 a However if prior to the sale of the personal residence the taxpayer converts the residential property into a rental property a loss sustained on the sale of the property will be deductible under Internal Revenue Code section 165 c 2 To calculate the loss on residential property that was converted into a rental prior to the sale of the property Treasury Regulation section 1 165 9 2 states that the basis of the property will be the lesser of either the fair market value at the time of conversion or the adjusted basis determined under Treasury Regulation section 1 1011 1 External links editTax law on the sale of inherited property is not settled nbsp This tax related article is a stub You can help Wikipedia by expanding it vte Retrieved from https en wikipedia org w index php title Loss on sale of residential property amp oldid 1090517817, wikipedia, wiki, book, books, library,
