Tax question on home losses

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screwrealestate_IHB

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<p>Been a while since I posted, looks like the discussions keep getting better....</p>

<p>So I am constantly reminded of how much real estate sucks, and a word in all caps that begins with F and ends with K would be the better beginning to my name on here. </p>

<p>Anyway, so I am doing my taxes and have pretty much come to the end of all the deductions I can do for my situation. I sold my house in Florida earlier this year after about 11 months on the market. Total cash losses were about 7 months of mortgage and tax payments for about $14,000, a short sale payoff of $15,000 at closing, and about $1,000 more of random lawncare, repairs, and etc. I am luckily expempt from the taxes from the short sale and have pretty much claimed all deductions from interest, taxes, charity contributions, my wife's business expenses (she is an independant spanish interpreter), and etc. I received a cost of living lump sum and my wife gets paid on 1099Cs so now at the end of all my deductions I owe uncle sam about $6000. This really sucks and it pisses me off since I have managed to pay off about $6,000 of credit card debt over the last few months and now this just adds it right back on. It really sucks that you are tax exempt on housing gains but cannot deduct losses on a primary residence as opposed to investment property. </p>

<p>So I have looked into this a decent amount and don't think there is much I can do, but do any of you have any ideas of how I can deduct any of this stuff or lower my income? Any weird ways of retroactively converting it to a rental or a non-primary residence since I was living here for almost a year before it sold? Anyone ever negotiate payments on taxes? I don't have $6000 in cash I wish to use unless I sell all the stock in my savings account and go back to having $0.0 in cash savings.</p>

<p>Any help or contact info of really good CPAs or tax guys out there wold be greatly appreciated!</p>

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<p>screwrealestate, we haven't heard from some of our accountants on this blog as I think they are busy at work with their tax year. They may be slow with their response.</p>

<p>Even though you are dealing with this tax situation, it must be nice to have finally sold your house. Congrats on that! My aunt and uncle have had their Florida house on the market for almost two years now. </p>

<p>Best of luck!</p>
 
can't have your cake and eat it, too. be glad that you can exempt a certain amount of capital gains from sale of your primary residence. That's the flip side of not being able to take losses on personal property.



My advice: up your fed withholding for this upcoming your so you have enough withheld when it comes time to pay your 2008 bill. You can set up an installment agreement with the IRS. You can set one up to pay over 60 months.



It would be quite illegal to say that it was a rental and you try to claim a loss on it when in fact it was not a rental at all.
 
sre - Sounds like you have taken all your deductions. There is no legal way to retroactively convert your residence to a rental. You can arrange to make payments to the IRS. but they charge interest.
 
I know someone who works in settlements / disputes and on the subject of the IRS he mentioned "offer and compromise". I am not sure what this entails, but you may want to look into this. Good luck & congrats on getting out from under that house.
 
Yes, agreed you should try and look on the bright side (even though it's tough)......and thank your lucky stars you were able to unload the abode.
 
<p>Yea I was hoping for an answer but I pretty much figured out as much myself. I will look into the offer and compromise thing, though I do have some savings to pay from. I really don't want to at all but I guess its better than jail...</p>
 
sre - It is an offer IN compromise and generally speaking, if you are making approximately now what you were making when you incurred the tax liability, you will be able to make payments, but will not be able to pay less than you owe. Be very, very wary of the ads you hear promising that you will be able to pay pennies on the dollar. That is only true in specific circumstances and when one is being investigated for an offer which involves forgiveness of tax owed, it is worse than an audit. Any assets over subsistance level and will be liened and taken first, excepting retirement funds. The only folks who pay pennies on the dollar are those who have no assets or income.
 
Yes I looked into this before, though forgot the terms. I don't think I would be part of the 1% of people who actually get a reduction in their taxes. Oh wait, I forgot about that trip to Vegas where I lost $30,000!
 
So I am pretty well through my taxes and wanted to have a review with a good CPA to check everything and maybe see other deductions or anything I may be overlooking. Any recommendations for someone near the 55 fwy cities?
 
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