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Tax Law (Questions About Taxes)/loss on lakefront condominium


We purchased a waterfront condo as an investment(potential rental and property appreciation) in 2007 for $107000, however, in 2008 the lake's water was condemned by the state EPA due to a poisonous blue green algae caused by agricultural run-off,  which causes skin conditions and even death. As a result the publicity ruined the value of this property and in 2012 we sold it for $69000, without ever renting it. Is this loss deductible? The property was located on Grand Lake St. Marys, in Celina, Ohio and the property is still condemned by the EPA.


Thanks for your question.

If you can demonstrate that it was intended as an investment/rental property and was not used for personal purposes you can deduct the loss. Since it was never rented, you would likely have to classify it as investment, meaning the loss was capital, rather than an ordinary loss.  But you could try for the rental route.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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