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Old 10-12-2012, 08:51 AM
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How to treat sale of Investment real estate converted from Rental Property.

I sold a property in 2011 that I held approx 6 yrs. I rented the house out for the first 2 years and it was vacant the remaining years. I did not use the property myself. For the first 2 years I completed Sch E and claimed depreciation. From the 3rd year on, I did not complete Sch E. since it was not used for business. If I recall correctly, my research at the time of conversion indicated I could convert the property to "investment property" but could only claim some limited deductions on Schedule A for the last 4 years. So which forms need to be completed regarding this sale on my individual Tax Return? Also, I would think I need to add prior depreciation taken to my cost basis. The property sale resulted in a loss. If possible, I would rather take a long term capital loss which I could carry forward. I do not need any ordinary losses for 2011. Thanks for any guidance.



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