Can you claim a loss on the sale of rental property


You cannot claim a loss on the sale of rental property, but you can use it to offset any capital gains on the sale of another rental property in the same tax year.


Eileen: At the year 2000, I bought a house for $9000. I sold it this year for $87,000 and it's a rental house, can I claim a loss?

Attorney Tom Olsen: You can only claim a loss if you match it up against a profit, for example, you sold another piece of property and you made a profit on that, you can deduct this loss against that profit. If you don't have any other profits then you are going to-- There's nothing to do about it. Aileen, remember this, when you have a rental property, typically, you are depreciating that on your taxes.

Even though you paid $90,00 for it after you've depreciated all these years, your basis may now be 70,000 and now, you're selling it for 87,000 and paying capital gains on your $17,000 profit. Eileen, be careful. You may be under misunderstanding about what your tax liability is on that. Thank you for calling.