If you sell your home at a profit, the tax law is on your side. But if you sell at a loss, the IRS just won’t cut you a break.
That’s because your home is a personal asset and the general rule is, you don’t get deductions for losses on personal assets.
That’s where your home office comes to the rescue. You see, when you sell your home at a loss, the IRS will give you a deduction on the portion of your home used as a home office or for some other income-producing activity.
Want to find out how Uncle Sam will cut you some slack if you’re selling into a bad housing market? Read my new article titled Tax Tips: Silver Lining for a Loss on the Sale of Your Home? Deduct Your Home-Office Loss—and Slash Your Taxes.
Three ways our fact-filled article can help you:
- We’ll explain how you can take a loss on your home office. It’s not hard if you meet two “income producing” criteria. We’ll tell you what they are when you read the full article.
- You’ll learn the right way to calculate your loss. To come out ahead, you have to follow a special procedure for determining the adjusted basis of the income-producing portion of your home. We’ll show you how to make the calculation when you to read the full article.
- We’ll tell you how to avoid a nasty fight with the IRS. Questions about the “fair market value” of your home can lead to problems. We’ll explain a strategy designed to keep you out of hot water when you read the full article.