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A reader named Sally bought property that has since fallen in value. If she sells it for less than she paid, what effect will it have on her taxes? DailyFinance's Laura Rowley has the answer.



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What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

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ROBERT OLSON

When I am interested in an article on your home page and want to read it, I have to wade through numerous other items and pop-ups and often can still not find the article I want to read, like today, the article by Laura Rowley on taking a tax benefit when one sells a house at a loss.

Judy Olson

November 21 2011 at 11:38 AM Report abuse rate up rate down Reply
Juyhkuyhj

OMG,I want to share a mews to you. My best fríènd ,she just has annóuncéd hér wēddīng wīth a rich mān who is a cèlèbrìty !They mèt via~~~~SéêkSúɡárDαd.Сσм ~~~~ ..it is the lārgēst and bēst clúb for rich man with yung and beautiful woman and theìr àdmirèrs to chát ōnlìnè. …You do nǒt hávè to bê rīch ór fāmóùs. ,bùt yōu cān meēt yóùr trùē lòvê , It’s wòrthy ǎ try!Are they talking about capital gains? If so, of course no one will have to pay if the property has dropped in value below what they paid.... when you sell, your gains are on the profits, if there's no profit, there's no gain, and no tax.

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--------People who have a reverse mortgage (over 65 crowd) how will this affect their families upon their demise? Mortgage
was more but with property decline, will the bank have to eat the loss? Just curious.

November 18 2011 at 4:34 AM Report abuse rate up rate down Reply
ilm9p

This by far her most lame attempt yet. I gather she refering to property, as in land, as in a parcel of dirt? In other words, there's no house on it. No kidding talk to an a tax professional - anybody that listens to this babble as gospel gets what they had coming in the form of an audit. Laura, if you're going to spout nonsense like this at least have the courtesy to pull the camera back and flash a little thigh in the process - that's what "Fox News" style sound bites are all about. Get with the program, woman!

November 17 2011 at 7:44 AM Report abuse +1 rate up rate down Reply
marge

People who have a reverse mortgage (over 65 crowd) how will this affect their families upon their demise? Mortgage
was more but with property decline, will the bank have to eat the loss? Just curious.

November 16 2011 at 11:18 PM Report abuse rate up rate down Reply