Residential Rental Property - Can 2012 loss be carried back two years??

[MAJ]

Client whom I have not seen in 2 years contacts me and needs their return(s) done right away.
3 year.. 2010, 2011, 2012. When she moved in 2009 she kept the old house due to market conditions.

She has been renting for 3 years. she cannot keep payments up on both and she has a bad tenant who is always late.
She couldn't take the land lord business and sold in 2012. There's about $12k in depreciation. It was a loss of $64k.

Question: Can she carry the loss back any number of years? Two years?

Your help is always appreciated.....

Oh..Why is it when you follow up with them they can take their sweet. But when they finally come they need it in 2 days. Go figure!!

[joanmcq]

Not unless it generates an NOL. Otherwise any passive losses that could be c/f during the years she was renting it would all be freed up in the year of sale.

[Burke]

A loss of $64K in the year of sale probably did produce an NOL, reading between the lines of OP. But that info was not given explicitly.

[MAJ]

NOL Retnal Property

My apologies if I left items out. First rental property I've work with that was sold...

The owner participated in the rental process.
Collected the rent, made or contracted repairs, etc.

C/F?? I presume Carry Forward - Actually - Trying to carry back. If Possible.

The user had a $5k tax debt in 2010.
If I can carry back this would help her 2010 position.

What other questions / answers are needed to determine if c/b is allowed.
I am looking in Tax Book and feel like an idiot!!

Thank you in advance.

[David1980]

Is the $64k loss based on original purchase cost whenever they first bought the house or the FMV in 2009 when it was converted to rental?

[appelman]

As Joan says

If and only if there is an NOL will there be a two-year carry back. Basis for the sale should be the LESSER of original basis or FMV at time of conversion to rental.

[Burke]

My apologies if I left items out. First rental property I've work with that was sold...
The owner participated in the rental process. Collected the rent, made or contracted repairs, etc.

C/F?? I presume Carry Forward - Actually - Trying to carry back. If Possible.
The user had a $5k tax debt in 2010. If I can carry back this would help her 2010 position.
What other questions / answers are needed to determine if c/b is allowed.
I am looking in Tax Book and feel like an idiot!!
Thank you in advance.

Basically, the answer is yes IF you have a 2012 NOL produced by the sale of rental property. (Negative income on the 1040.) See Pub. 536 and various discussions -- Tax Almanac has a good one.

[WhiteOleander]

If your calculations are correct and there us a 64000 loss, that in and of itself cannot be carried back or forward. If the loss, when calculated with all other income on the return, creates a Net Operating Loss, that can be carried back or forward depending on the election the t/p makes.

So, you need to determine if there is a NOL. That is the answer to your question.

[taxea]

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