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Old 04-17-2012, 09:21 PM
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Question Deduction of Loss from Investment Property

A group of us (10) funded a mortgage on raw land. The borrower defaulted, so we foreclosed in 2010. In 2011, we sold the land at a loss. Is there any way to take the whole loss now (I have no gains to offset), or do I have to take it $3000/year.



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Old 04-19-2012, 04:33 AM
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“ Is there any way to take the whole loss now (I have no gains to offset), or do I have to take it $3000/year.”---> Yur investment raw land property is treated completely differently from land that you own as your personal residence. You can deduct the property taxes as an itemized deduction on Sch A as long as you itemize deductions on yur return. You can deduct your losses on the sale of the land held for investment purposes, LTCL, I guess( as you owned it for more than one year) on 1040 Sch D/form 8949. You fully deduct LTCL against LTCG on Form 1040, Sch D/Form 8949. If LTCL exceed LTCG you can deduct the excess on your tax return : your allowable capital loss tax deduction on your tax return for any tax year, figured on Form 1040, Sch D/Form 8949, is limited to the lesser of $3,000 ($1,500 if you are married and file a separate tax return), or your capital loss as shown on Form 1040, line 21 of Sch D. If you have a capital loss on Form 1040, line 21 of Sch D that is more than the yearly limit on capital loss tax deductions, you can carry over the unused part of the tax deductible capital loss to later tax years until it is completely used up



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