AboutHelen P. O`Planick, EA Expertise I am a tax professional, with experience in individual taxation. I would prefer not to answer questions about non-resident aliens or corporate taxation. Please do not ask me state related questions, unless the state is Pennsylvania. There are 42 taxing states and 42 TOTALLY different sets of state tax law.
Experience I have been preparing tax returns almost all my life. I have been in professional practice for 25 years and I am enrolled to practice before the Internal Revenue Service.
Organizations National Association of Enrolled Agents
Publications I am a prior Money Magazine Tax Test taker and have been quoted extensively in all media including monthly periodicals and books by tax authorities.
Question I have rented out my primary residence last year for a period of one year ending August 2009. I am going to sell that property after this lease period. As per current housing crisis data, I am expecting a loss. Is this loss tax deductible? I appreciate your earliest answer for this question.
Answer It depends on the fair market value on the day you started renting it out and of course the depreciation allowed or allowable.
Let's say you paid $200K when you bought it and it was worth $150K when you started renting it out. Your basis for loss is $150K less depreciation of (just a number) $6K. So if you sell for more then $144K, you don't have a lot of gain (just depreciation recapture), but if you sell for $124K, you would have a 20K loss.
