Housing direction

[Fletch]

[quote=HLS]Former…
There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
..HLS[/quote]

Can you elaborate what you mean by the govt sharing in their loss? I sold my house (primary residence) at a loss and could not find any way to deduct this…

[(former)FormerSanDiegan]

[quote=Fletch][quote=HLS]Former…
There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
..HLS[/quote]

Can you elaborate what you mean by the govt sharing in their loss? I sold my house (primary residence) at a loss and could not find any way to deduct this…[/quote]

One example is principal write-downs given by the bank, that are subsidized by government support of these banks.

But, you are right, there is no deduction for losses on a personal residence.

It is too late in your situation, but for others out there in a similar boat …
One strategy (untested by me) might be to convert it to an investment property. The value of the property at conversion time (or the original value whichever is lower) is the cost basis used for determining depreciation and future capital gains and losses.

So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html

[(former)FormerSanDiegan]

[quote=Fletch][quote=HLS]Former…
There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
..HLS[/quote]

Can you elaborate what you mean by the govt sharing in their loss? I sold my house (primary residence) at a loss and could not find any way to deduct this…[/quote]

One example is principal write-downs given by the bank, that are subsidized by government support of these banks.

But, you are right, there is no deduction for losses on a personal residence.

It is too late in your situation, but for others out there in a similar boat …
One strategy (untested by me) might be to convert it to an investment property. The value of the property at conversion time (or the original value whichever is lower) is the cost basis used for determining depreciation and future capital gains and losses.

So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html

[(former)FormerSanDiegan]

[quote=Fletch][quote=HLS]Former…
There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
..HLS[/quote]

Can you elaborate what you mean by the govt sharing in their loss? I sold my house (primary residence) at a loss and could not find any way to deduct this…[/quote]

One example is principal write-downs given by the bank, that are subsidized by government support of these banks.

But, you are right, there is no deduction for losses on a personal residence.

It is too late in your situation, but for others out there in a similar boat …
One strategy (untested by me) might be to convert it to an investment property. The value of the property at conversion time (or the original value whichever is lower) is the cost basis used for determining depreciation and future capital gains and losses.

So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html

[(former)FormerSanDiegan]

[quote=Fletch][quote=HLS]Former…
There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
..HLS[/quote]

Can you elaborate what you mean by the govt sharing in their loss? I sold my house (primary residence) at a loss and could not find any way to deduct this…[/quote]

One example is principal write-downs given by the bank, that are subsidized by government support of these banks.

But, you are right, there is no deduction for losses on a personal residence.

It is too late in your situation, but for others out there in a similar boat …
One strategy (untested by me) might be to convert it to an investment property. The value of the property at conversion time (or the original value whichever is lower) is the cost basis used for determining depreciation and future capital gains and losses.

So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html

[(former)FormerSanDiegan]

[quote=Fletch][quote=HLS]Former…
There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
..HLS[/quote]

Can you elaborate what you mean by the govt sharing in their loss? I sold my house (primary residence) at a loss and could not find any way to deduct this…[/quote]

One example is principal write-downs given by the bank, that are subsidized by government support of these banks.

But, you are right, there is no deduction for losses on a personal residence.

It is too late in your situation, but for others out there in a similar boat …
One strategy (untested by me) might be to convert it to an investment property. The value of the property at conversion time (or the original value whichever is lower) is the cost basis used for determining depreciation and future capital gains and losses.

So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html

[Fletch]

[quote=FormerSanDiegan]
So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html%5B/quote%5D

Thanks for elaborating, FSD. I feel better now. I can think of no way I could have (ethically) gotten an appraisal that would be have been high enough to make the tax write off worth the conversion.

[Fletch]

[quote=FormerSanDiegan]
So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html%5B/quote%5D

Thanks for elaborating, FSD. I feel better now. I can think of no way I could have (ethically) gotten an appraisal that would be have been high enough to make the tax write off worth the conversion.

[Fletch]

[quote=FormerSanDiegan]
So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html%5B/quote%5D

Thanks for elaborating, FSD. I feel better now. I can think of no way I could have (ethically) gotten an appraisal that would be have been high enough to make the tax write off worth the conversion.

[Fletch]

[quote=FormerSanDiegan]
So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html%5B/quote%5D

Thanks for elaborating, FSD. I feel better now. I can think of no way I could have (ethically) gotten an appraisal that would be have been high enough to make the tax write off worth the conversion.

[Fletch]

[quote=FormerSanDiegan]
So, if you convert your primary to a rental and received a favorable (inflated?) appraisal at that time for tax purposes, you could eventually take the loss when selling as an investment property.

http://www.aicpa.org/PUBS/taxadv/jul2008/casestudy.html%5B/quote%5D

Thanks for elaborating, FSD. I feel better now. I can think of no way I could have (ethically) gotten an appraisal that would be have been high enough to make the tax write off worth the conversion.

[garysears]

I appreciate the ego boost patient. Truth is I am NOT smart, practically speaking. My life history so far includes a number of DUMB financial decisions and any real learning was done the hard way.

This site was the gateway for me to a basic financial education. I also visited thehousingbubbleblog for awhile but never posted. I currently spend a lot of time on Calculated Risk where I sometimes post as Not_Going_To_Post. I know you visit there. (really I intended to never post)

Besides Rich and his excellent primer and posts I learned a little from lots of posters here, enough to have confidence in my ability to evaluate potential properties. I am confident I will not have a cash flow problem with my purchase though only time will tell if I overpaid or not. Like most people I ended up paying a little more than my original target price.

I appreciate your insights as well. I know for a fact I take more than I give here.

[garysears]

I appreciate the ego boost patient. Truth is I am NOT smart, practically speaking. My life history so far includes a number of DUMB financial decisions and any real learning was done the hard way.

This site was the gateway for me to a basic financial education. I also visited thehousingbubbleblog for awhile but never posted. I currently spend a lot of time on Calculated Risk where I sometimes post as Not_Going_To_Post. I know you visit there. (really I intended to never post)

Besides Rich and his excellent primer and posts I learned a little from lots of posters here, enough to have confidence in my ability to evaluate potential properties. I am confident I will not have a cash flow problem with my purchase though only time will tell if I overpaid or not. Like most people I ended up paying a little more than my original target price.

I appreciate your insights as well. I know for a fact I take more than I give here.

[garysears]

I appreciate the ego boost patient. Truth is I am NOT smart, practically speaking. My life history so far includes a number of DUMB financial decisions and any real learning was done the hard way.

This site was the gateway for me to a basic financial education. I also visited thehousingbubbleblog for awhile but never posted. I currently spend a lot of time on Calculated Risk where I sometimes post as Not_Going_To_Post. I know you visit there. (really I intended to never post)

Besides Rich and his excellent primer and posts I learned a little from lots of posters here, enough to have confidence in my ability to evaluate potential properties. I am confident I will not have a cash flow problem with my purchase though only time will tell if I overpaid or not. Like most people I ended up paying a little more than my original target price.

I appreciate your insights as well. I know for a fact I take more than I give here.

[garysears]

I appreciate the ego boost patient. Truth is I am NOT smart, practically speaking. My life history so far includes a number of DUMB financial decisions and any real learning was done the hard way.

This site was the gateway for me to a basic financial education. I also visited thehousingbubbleblog for awhile but never posted. I currently spend a lot of time on Calculated Risk where I sometimes post as Not_Going_To_Post. I know you visit there. (really I intended to never post)

Besides Rich and his excellent primer and posts I learned a little from lots of posters here, enough to have confidence in my ability to evaluate potential properties. I am confident I will not have a cash flow problem with my purchase though only time will tell if I overpaid or not. Like most people I ended up paying a little more than my original target price.

I appreciate your insights as well. I know for a fact I take more than I give here.

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