newbie_commuting_IHB
New member
Hi,
This is my first post here, although I have been lurking now for several months. The forums and blogs on this site have really been a huge source of information to me. Thanks!
Our current issue is as follows:
5-years ago, we fell into the trap of using the equity in our primary residence to buy a rental property. Our income is pretty good and our primary residence had appreciated by a lot, thus affordability was not an issue. The rental property is in a desirable neighborhood and renting it out was not difficult. It has been rented out almost continuously, although always at some loss to us. We have never been able to claim any losses on our taxes though, since we are in a high tax bracket.
However, over 5 years, the property values in that area have dropped significantly (~ 30%), and frankly we have gotten tired of being landlords. This year, we decided to just take a chance and sell the property, which is going surprisingly fast. Obviously, we are making a huge loss on the property (~120K). Add to it the losses carried over for 5 years, and I expect the net loss to be close to 200K.
We have recently sold our primary residence (job relocation), and are planning on renting for the next few years in Irvine while waiting for home prices to stabilize. However, that means we no longer have a mortgage deduction.
I was wondering if there is any way we can split the loss from the rental property and spread it over the next 3 years while filing our tax returns? Since we won't have a mortgage deduction, it would benefit us tremendously in getting some tax break. Or do we need to claim the entire loss in our 2009 tax returns? I realize this is more of the question for a tax consultant, but I would really appreciate the opinions of folks on this site. Any feedback would be most appreciated. Thanks!
Wish I had seen some of the calculations on this site before we bought the property 5 years ago....
This is my first post here, although I have been lurking now for several months. The forums and blogs on this site have really been a huge source of information to me. Thanks!
Our current issue is as follows:
5-years ago, we fell into the trap of using the equity in our primary residence to buy a rental property. Our income is pretty good and our primary residence had appreciated by a lot, thus affordability was not an issue. The rental property is in a desirable neighborhood and renting it out was not difficult. It has been rented out almost continuously, although always at some loss to us. We have never been able to claim any losses on our taxes though, since we are in a high tax bracket.
However, over 5 years, the property values in that area have dropped significantly (~ 30%), and frankly we have gotten tired of being landlords. This year, we decided to just take a chance and sell the property, which is going surprisingly fast. Obviously, we are making a huge loss on the property (~120K). Add to it the losses carried over for 5 years, and I expect the net loss to be close to 200K.
We have recently sold our primary residence (job relocation), and are planning on renting for the next few years in Irvine while waiting for home prices to stabilize. However, that means we no longer have a mortgage deduction.
I was wondering if there is any way we can split the loss from the rental property and spread it over the next 3 years while filing our tax returns? Since we won't have a mortgage deduction, it would benefit us tremendously in getting some tax break. Or do we need to claim the entire loss in our 2009 tax returns? I realize this is more of the question for a tax consultant, but I would really appreciate the opinions of folks on this site. Any feedback would be most appreciated. Thanks!
Wish I had seen some of the calculations on this site before we bought the property 5 years ago....
