Anyone know the deal with capital losses? I think that's what they call it.

You get something, or can declare the losses on your home if you sell for less than what you paid-- right?

Can someone explain how that works, and what you get-- I assume it's at tax time?

If we sold for what our realtor told me could be more the higher end of what we could get, it's still $15K LESS than our mortgage, and $75K less than what we paid, not including improvements we put in.

Just need to get all my info together to determine what we can afford on the other side..

Re: Anyone know the deal with capital losses? I think that's what they call it.

here is what i found for you:

10 Facts About Capital Gains and Losses


IRS Tax Tip 2010-35


Have you heard of capital gains and losses? If not, you may want to read up on them because they might have an impact on your tax return. The IRS wants you to know these ten facts about gains and losses and how they could affect your tax situation.

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.

When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you paid for it – is a capital gain or a capital loss.

You must report all capital gains.

You may deduct capital losses only on investment property, not on property held for personal use.

Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.

If you have long-term gains in excess of your long-term losses, you have a net capital gain to the extent your net long-term capital gain is more than your net short-term capital loss, if any.

The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income. For 2009, the maximum capital gains rate for most people is15%. For lower-income individuals, the rate may be 0% on some or all of the net capital gain. Special types of net capital gain can be taxed at 25% or 28%.

If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.

If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.

Capital gains and losses are reported on Schedule D, Capital Gains and Losses, and then transferred to line 13of Form 1040.
For more information about reporting capital gains and losses, see the Schedule D instructions, Publication 550, Investment Income and Expenses or Publication 17, Your Federal Income Tax. All forms and publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Re: Anyone know the deal with capital losses? I think that's what they call it.

thanks...

So we'd need to someone show our apt as an investment, as opposed to our home.

There has got to be some kind of write-off for your home.

I'd need to ask my accountant, but I think he's a little busy today!

Re: Anyone know the deal with capital losses? I think that's what they call it.

We looked into this last year when we knew were going to sell for a loss. Unfortunately, you can't write off the loss. I don't remember the specifics, but I believe the only way we could have is if we rented it out for a certain amount of time (I want to say 2 years, but can't remember) and then sold it for a loss.

Re: Anyone know the deal with capital losses? I think that's what they call it.

You can't take a capital loss on the sale of a personal residence. Even with regular capital losses, the most you could take in any one year if filing MFJ is $3,000. The rest would have to be deferred to subsequent years.