Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.
07-18-2017 05:24 PM
07-18-2017 05:47 PM
Welcome to the H&R Block community.
Simply put, if you sell the property at an overall loss, which is what it sounds like will happen, then there won't be any taxable income from this. However, if you receive a Form 1099-S then the sale must still be reported.
Remember, your gain or loss is figured by:
SELLING PRICE - SELLING EXPENSES = REALIZED AMOUNT - ADJUSTED BASIS = TAXABLE GAIN OR YOUR LOSS
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)
07-18-2017 05:49 PM
Also, remember that your rental income is your NET income after your rental expenses are deducted from everything the rental activity brought in, so you may not actually have taxable rental income but you must still file your Schedule E showing your revenue, expenses, and net income or loss from the rental.