Question for the Tax People :-)

Discussion in 'Off-Topic Discussions' started by mattbrent, Oct 11, 2008.

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  1. mattbrent

    mattbrent Well-Known Member

    Hi all!

    My wife and I are attempting to sell our house. It has been on the market since May. Our new realtor is highly advising us to seriously drop our asking price. Our old realtor priced it at $199,950. Under her, we had dropped it to $194,950. The new realtor (we got a new one... long story) suggests dropping it to around $178,000. The problem is if we do that, we'll take about a 6-8K loss on our mortgage.

    My wife has a friend who just sold her house in Pennsylvania. They were in a similar situation and sold their house for a loss. However, their realtor told them they could deduct the loss on their taxes. Is this true? I didn't know if it was a federal thing or just a state thing.

    Furthermore, could the realtor's commission of 6% be deducted when calculating moving expenses on our taxes?

    Thanks,
    Matt
     
  2. sentinel

    sentinel New Member

    I would suggest you contact either the IRS or your accountant for a definitive answer to your question.

    In the meantime, here is some information that might provide some background regarding selling your home w.r.t taxation.

    Some moving expenses related to a new job may be tax deductible.

    Nondeductible Expenses
    You cannot deduct the following items as moving ex-
    penses.

    • Any part of the purchase price of your new home.
    • Car tags.
    • Driver’s license.
    Expenses of buying or selling a home (including
    closing costs, mortgage fees, and points).

    • Expenses of entering into or breaking a lease.
    • Home improvements to help sell your home.
    • Loss on the sale of your home.
    • Losses from disposing of memberships in clubs.
    • Mortgage penalties.
    • Pre-move househunting expenses.
    • Real estate taxes.
    • Refitting of carpet and draperies.
    • Return trips to your former residence.
    • Security deposits (including any given up due to the
    move).
    • Storage charges except those incurred in transit and
    for foreign moves.

    As always consult with a tax professional as there may be excptions not otherwise known to regular folks.
     
  3. KYarb

    KYarb New Member

    Would definitely check with someone involved in taxes, because that says you can't deduct loss on a sale.
     
  4. mattbrent

    mattbrent Well-Known Member

    Yes, I will. However, the way that is written, it cannot be deducted as a moving expense. If our friend's realtor mentioned it, perhaps the loss is deducted as something else.

    -Matt

    No sooner did I post this did I find the information I was looking for. On the IRS website it clearly says that loss on the sale of a personal residence is nondeductible. Bummer.
     
    Last edited by a moderator: Oct 12, 2008
  5. KYarb

    KYarb New Member

    Major bummer! :(
     

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