2HOTinPHX
Full time employment: Posting here.
So my siblings and I inherited parents house in January 2020. One sibling had been living with them for 5+ years since it was so expensive for a single person to rent in the area. It was beneficial for all parties which was wonderful.
So then Covid hits and were thinking it would probably only be a few months before we could safely travel to go thru the stuff in the house. We all agreed that the brother living there should stay there and he did not need to pay any rent cause he is family and would be taking care of the place. Finally after over a year plus of waiting the siblings there decided to get the house ready and sold.
So we get this K-1 form info from sibling who is trustee and the accountant he is using. It is saying we can do a capital loss on the sale of the house and each take a small deduction. So I am looking into it more and it appears because we let the one sibling stay there we may not qualify for the deduction
https://www.irs.gov/newsroom/helpful-facts-to-know-about-capital-gains-and-losses
From the IRS.Capital Losses
Taxpayers whose capital losses are more than their capital gains can deduct the difference as losses on their tax returns, up to $3,000 per year, or $1,500 if married and filing a separate return. When their total net capital loss is more than the limit they can deduct, taxpayers can carry it over to next year's tax return.
Capital loss deductions are applicable to the sale of investment property, but not on the sale of property held for personal use.
Anyone have experience with this?
I know some siblings will probably say so what how would the IRS find out if the sibling had another out of town address...ect ect...but doesn't feel right to me. Any thoughts?
https://www.sapling.com/11414730/can-claim-sale-inherited-property-loss
So then Covid hits and were thinking it would probably only be a few months before we could safely travel to go thru the stuff in the house. We all agreed that the brother living there should stay there and he did not need to pay any rent cause he is family and would be taking care of the place. Finally after over a year plus of waiting the siblings there decided to get the house ready and sold.
So we get this K-1 form info from sibling who is trustee and the accountant he is using. It is saying we can do a capital loss on the sale of the house and each take a small deduction. So I am looking into it more and it appears because we let the one sibling stay there we may not qualify for the deduction
https://www.irs.gov/newsroom/helpful-facts-to-know-about-capital-gains-and-losses
From the IRS.Capital Losses
Taxpayers whose capital losses are more than their capital gains can deduct the difference as losses on their tax returns, up to $3,000 per year, or $1,500 if married and filing a separate return. When their total net capital loss is more than the limit they can deduct, taxpayers can carry it over to next year's tax return.
Capital loss deductions are applicable to the sale of investment property, but not on the sale of property held for personal use.
Anyone have experience with this?
I know some siblings will probably say so what how would the IRS find out if the sibling had another out of town address...ect ect...but doesn't feel right to me. Any thoughts?
https://www.sapling.com/11414730/can-claim-sale-inherited-property-loss