Use Capital Loss Carryover To Offset Gain On Home Sale
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Yes, your capital loss carryover may be deducted against the capital gain on the sale of your house. Keep in mind, if your capital losses were to exceed your capital gain, the amount of the excess loss you can claim is the lesser of $3,000 ($1,500 if you are married filing separately) or your total net loss. For example, if the gain on your home is $100,000 and you have $120,000 loss carryover, then you can deduct $103,000 (if you’re married filing jointly) and carry over the remaining $17,000 to future years. The net loss would be $103,000. Now let’s go over the calculation of the capital gain on the sale of the home. Here’s how it works: The first step is to deduct all of your selling expenses, including commissions, advertising, legal fees and any seller-paid expenses from the selling price of the home to come up with the “amount realized” on the sale. The next step is to deduct your “adjusted basis” from the amount realized to come up with your gain on the sale. Your adjusted basis is your original cost of the home increased by any capital improvements you made over the past 30 years.
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Yes, your capital loss carryover may be deducted against the capital gain on the sale of your house. Keep in mind, if your capital losses were to exceed your capital gain, the amount of the excess loss you can claim is the lesser of $3,000 ($1,500 if you are married filing separately) or your total net loss. For example, if the gain on your home is $100,000 and you have $120,000 loss carryover, then you can deduct $103,000 (if you’re married filing jointly) and carry over the remaining $17,000 to future years. The net loss would be $103,000. Now let’s go over the calculation of the capital gain on the sale of the home. Here’s how it works: The first step is to deduct all of your selling expenses, including commissions, advertising, legal fees and any seller-paid expenses from the selling price of the home to come up with the “amount realized” on the sale. The next step is to deduct your “adjusted basis” from the amount realized to come up with your gain on the sale. Your adjusted basis is your original cost of the home increased by any capital improvements you made over the past 30 years.