Originally Posted by srvaughan11
#1;I moved out of state for a job in June 2012. I sold my old home in June 2013.
#2; How do i classify this home? Can I take a loss on the home if possible?
#1;Is it your primary residence? A person's primary residence, or main residence is the dwelling where they usually live, typically a house or an apartment. A person can only have one primary residence at any given time, though they may share the residence with other people. A primary residence is considered to be a legal residence for the purpose of income tax and/or acquiring a mortgage.Criteria for a primary residence consist mostly of guidelines rather than hard rules, and residential status is often determined on a case-by-case basis. The only properties that can be excluded from capital gains tax consideration are primary residences and then, in some cases, only partially. There is a primary residence exemption of up to $250k for an individual and $500k for a couple filing jointly. If your capital gain on the sale exceeds those amounts, you will still have to pay the tax on the amount that remains after using the exclusion. In order to claim this exemption, you must have lived in the property as your primary residence for two out of the last five years. Additionally, the exclusion can only be used once every two years, so provided you can show that the home was your primary residence for the two-year period, you have not used the exclusion and your capital gain did not exceed $250k for an individual or $500k for a married couple filing jointly, then you won't owe any capital gains tax on your sale.
#2;UNLESS it is used as rental/investment, you can’t deduct capital losses on the sale of the home. If you sold rental or investment real estate at a loss, you may be able to deduct that loss from your taxes. If you sold your personal residence at a loss, that loss is not deductible. For the loss on the sale to be tax deductible, the real estate had to be held to produce rental income or a capital gain. The property could not be held for personal use.