Sale of Second Home

[erchess]

Taxpayer sold second home. Never at any time was it rented out or otherwise used to produce income and it was bought as a second home rather than for investment purposes. It was sold as a loss and I'm here asking for confirmation or contradiction of what I think I know.

I think the sale goes directly on Sch D as opposed to going somewhere else and carrying to D and I have to somehow tell my software that it is a nondeductible loss so that the bottom line on D won't carry anywhere else on the return. I think basis is calculated in exactly the same way as for a sale of a main home. (Once I know I have the theory right I can talk to Drake about how to do it in their software.)

[bgiez]

My software, TaxWorks, has a dropdown box when entering sales so you can choose a special treatment, such as a wash sale. One of the items to choose from is "personal" which then prevents the personal loss from being taken while still reporting the sale on Sched D.

Perhaps Drake has the same?

Barbara

[veritas]

why

Put the sale on the tax return at all?

[S T]

Aren't we

Required to report all gross income transactions, doesn't matter that the end result is a loss? We would surely have to report if a gain, yes?

I would think Schedule D - no loss taken since it is personal property.

Sandy

[erchess]

1099 S

was issued so would think could get IRS letter if not put on return.

Also while I don't have a cite I agree with Sandy - any significant gross income needs reporting even if the bottom line is a nondeductible loss.

Finally there is the client relations issue - client expects to see it on the return. If I don't show it then he may at some future time not tell me about something that does have to go on the return. Of course I conduct a thorough interview but I could forget something or he could "see" the question through the "lens" of this experience.

[PIGLEE]

In Drake on the Sch D, there is a misc column with a drop down menu, one of the chioices is "For Personal Loss"