FREQUENTLY ASKED QUESTIONS (FAQS) continued

LOSSES (HOMES, STOCKS, OTHER PROPERTY)

Q. Is the loss on the sale of your home deductible?

A. The loss on the sale of a personal residence is a nondeductible personal loss.

Q. How do you report the sale of a second residence?

A. Your second home is considered a capital asset. Use Form 1040 Schedule D to report sales, exchanges, and other dispositions of capital assets.

Additional information:
Publication 17, Your Federal Income Tax for Individuals
Publication 504, Divorced or Separated Individuals
Publication 523, Selling Your Home
Publication 527, Residential Rental Property
Publication 530, Tax Information for First-Time Homeowners
Publication 544, Sales and Other Dispositions of Assets
Publication 555, Community Property
Publication 587 Business Use of Your Home
Publication 936, Home Mortgage Interest Deduction
Tax Topic 409, Capital Gains and Losses
Tax Topic 503, Deductible Taxes
Tax Topic 505, Interest Expense

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