Would I be entitled to deduct a loss from the sale of my personal residence in 2010?

Mandy · #1 (**permalink**) 11-09-2010, 08:39 PM

I was forced to sell my personal residence this year at huge loss!! The question is, does the IRS allow these losses be to offset my regular income as reported on my W-2?

This would be a big help to me!

Thanks TaxGuru!

TaxGuru · #2 (**permalink**) 11-09-2010, 08:45 PM

Unfortunately for you and many others, the IRS considers a loss from a home sale a “personal loss” and hence no deduction is allowed at all on your personal tax return. Thus, you would not be entitled to offset any of these losses against your regular income.

There appears no good news on the horizon for the 1,000's of similar homeowners like you who will be selling their homes next year as a result of job losses and other economic pressures. These forced property sale's would further erode the property prices and contribute to potentially huge personal capital losses to the taxpayers.

I truly wish that the IRS changes this law to allow for a temporary deduction for some if not all of the losses from the sale of a principal residence especially in case of where taxpayers have lost their jobs due to the economic crisis!