Patrick and Kathy bought a home for $250,000 three years ago and sold it this year for $225,000. What is the deduction they can

Question

2 years ago

5

take for the loss on the sale?
$0
$2,500
20% of $25,000
60% of $25,000

1 answer:

Diano4ka-milaya [45] · Answer 1 · 2023-02-07T12:43:00+03:00

The amount they can take as deduction for the loss on the sale of their home is; $0.

<h3>How much can they take as deduction for the loss on the sale?</h3>

It follows that deductions can only be taken on losses incurred on the sale of property used for business or investment purposes.

Hence, since the item sold is their personal home, it follows that they cannot take any deduction on the loss on the sale.