Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Selling my home for less than I owe - tax question
So I bought my house 300,000 - now it's worth about 215,000. I owe 230,000. So when I sell it I'll have to pay 15,000 + closing costs. Does anyone know if this 15,000 can be counted as non-taxable income?
I just figure since I'm doing the "right" thing by saving my $$ and paying off the mortgage I should get a reward. If you do a short sale, you are forgiven in taxes for the differenece between what you owe. Shouldn't I get the same benefit?
I think the answer is probably no - just frustrating to be a responsible citizen and not get tax benefits : ( Okay vent over.
Re: Selling my home for less than I owe - tax question
If you sell your house for a gain its not taxed and similarly there is no benefit for selling at a loss. So the answer to the question you are trying to ask is no, there's nothing you can do on your taxes to reduce your income.
Also the loss you are taking is your purchase price less the sales price. It does not matter how much you owe on the house. And lastly, there's no thing as non taxable income. I think you are hoping there is a deduction for the loss on your sale, and the answer for that is still no.
PP, I assume you were trying to make some sort of limited point to the OP, but there is absolutely such a thing as nontaxable income, e.g. disability, Social Security up to a certain limit, certain types of military specialty pays, life insurance proceeds paid because someone died and named you the beneficiary, and more.
OP, no, sorry, you're out of luck re: the loss. Here it is from the horse's mouth.
My Pinterest
The Googlesites Paint Bio
Thinking of doing cosmetic updates to a dated home? These were our costs.
yeah I didn't write that very clearly. What I meant was that she wouldn't want that to be any kind of "income" as she's not making any money. The way her post was worded threw me off.
Our accountant told us we were in the same boat... we could empty our savings and pay the difference when we sold at a signifigant loss OR we could rent the house out for a year, thus making it an income property, then sell it at a loss -- THEN we can claim the loss... along with all the other write-offs you get for having an income property.
So, we rented out our house last month and we are currently house hunting. We were lucky that we pre-qualed for WAY more than we plan to spend on our new home, even with having our other mortgage.
I thought we'd be stuck in our old house forever, or go broke getting rid of it, but it looks like things might actually work out for us in a year or 2.