Is the sale of a residential rental property sold at a loss limited to $3,000.00 a year? My clients have a legitimate $70,000.00 (approx.) loss on the sale of a property that was rented since 2015 until time of sale (Aug 2019). Proseries is allowing the full amt to be deducted as an ordinary loss. This offsets the Schedule C income of almost the same amt. Is that correct or is the loss limited to $3,000.00 per year?
It shows Form 4797
Thanks for any help & more importantly your time.
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When you write "rented since 2015" it raises the question of when it was bought. Not too many parts of the country have seen a decline in home prices in the last five years. However, five years ago there were people who were still underwater on the house they bought in 2007, so they decided to rent until they could sell. Give us some numbers. When was it bought, for how much? When was it sold, for how much? What depreciation was claimed?
Thanks it was converted from personal to rental in 2015. From the client, I am trying to find the lesser of her basis ($294,000) or the market value when it was converted in 2015 to a rental property. There will be a loss, but maybe less than originally projected.
Thanks again for your help.