How would I declare a tax loss on the sale of a property in this weird situation?
Asked by: megan
This is a little complicated. We lived in a home 5 years ago. We rented it out after we moved. What type of tax loss am I eligible for given this situation: Say we paid $ 400,000 for it. We lived there for three years. For the last 5 years it has been a rental. When we moved out and the house became a rental it probably was worth $ 500000. Since the housing collapse the value has gone way down. It is now worth $ 380000. For a tax write off do I declare the purchase value or the value of the home when it became a rental unit? (I have extensive documentation that it was used as a rental unit and not a primary residence)
Asked: chris c