Aircraft tax question

On Sat, 03 Dec 2005 02:46:13 GMT, George Patterson
wrote:

TaxSrv wrote:

Whether a personal residence, or aircraft for personal use, no losses
(except for casualty loss) are ever allowed.

For whatever reason, I got a $3,000 capital loss deduction when I sold that
house. I don't remember what tax package I used that year.


There is no question that capital losses on personal property used for
personal purposes are not deductible.

Was the house used solely as a personal residence?

If not, I will guess that either the s/w was wrong or the user made a data
entry error. Perhaps GIGO at work?


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

Ron Rosenfeld wrote:

Was the house used solely as a personal residence?

Yes. The only thing I can think of is that we had moved the year before. I had
some renovation work to complete on the old place, so I didn't sell it for about
9 months. No one was living there, so, when the tax package asked if it was our
primary residence, I answered "no."

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

"George Patterson" wrote:
Was the house used solely as a personal residence?

Yes. The only thing I can think of is that we had
moved the year before. I had some renovation work
to complete on the old place, so I didn't sell it for
about 9 months. No one was living there, so, when
the tax package asked if it was our primary residence,
I answered "no."


You probably forced the software to consider it investment property,
which it wasn't. We can in provable circumstances hang onto a former
home as investment property, but 9 months of just fixing up for sale
won't make it such property in IRS eyes, no way.

Fred F.

TaxSrv wrote:

You probably forced the software to consider it investment property,
which it wasn't. We can in provable circumstances hang onto a former
home as investment property, but 9 months of just fixing up for sale
won't make it such property in IRS eyes, no way.

How about 14 years of fixing it up? That's what I did, and I have before and
after photos to prove it. I pretty much gutted the place and rebuilt from scratch.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

14 years of improvements changes the basis not the type of property from
primary residence to investment.

"George Patterson" wrote in message
newsntkf.2786$Yh2.496@trndny01...
TaxSrv wrote:

You probably forced the software to consider it investment property,
which it wasn't. We can in provable circumstances hang onto a
former
home as investment property, but 9 months of just fixing up for sale
won't make it such property in IRS eyes, no way.

How about 14 years of fixing it up? That's what I did, and I have
before and after photos to prove it. I pretty much gutted the place
and rebuilt from scratch.

George Patterson
Coffee is only a way of stealing time that should by rights
belong to
your slightly older self.

sfb wrote:
14 years of improvements changes the basis not the type of property from
primary residence to investment.

I'm not sure what you mean. Are you saying the property was investment?

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

On Sun, 04 Dec 2005 04:15:18 GMT, George Patterson
wrote:

sfb wrote:
14 years of improvements changes the basis not the type of property from
primary residence to investment.

I'm not sure what you mean. Are you saying the property was investment?

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

Since you moved out of the house nine months before selling it, the burden
of proof will be on you to prove to the IRS that the property was, in fact,
being held for investment purposes.

So far, you've presented no evidence for that.

Investment property is property that produces investment income.

Did your property ever produce income?

Did you advertise it for rent?

Did you actually rent it out?

Did you use the proceeds to purchase another property that you are clearly
using as "investment property"?

Since it was your main residence prior to the sale, and since you spent the
nine months between moving out and selling it engaged in "fixup"
activities, and since it does not appear that you actually engaged in any
activities to support the fact that you really considered this as an
investment property, I think you would have a difficult time proving to the
IRS that it should, in fact, be treated as an investment property, rather
than as your primary residence.

BWTFDIK?


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

The property is either your primary residence or some sort of
investment. The fact that you put money into the property changes the
financial basis - IRS word for original cost plus improvements. That you
improved the property does not in itself change the type of property..

"George Patterson" wrote in message
news:q3ukf.825$Qf5.702@trndny07...
sfb wrote:
14 years of improvements changes the basis not the type of property
from primary residence to investment.

I'm not sure what you mean. Are you saying the property was
investment?

George Patterson
Coffee is only a way of stealing time that should by rights
belong to
your slightly older self.

On Sat, 03 Dec 2005 17:00:42 GMT, George Patterson
wrote:

Ron Rosenfeld wrote:

Was the house used solely as a personal residence?

Yes. The only thing I can think of is that we had moved the year before. I had
some renovation work to complete on the old place, so I didn't sell it for about
9 months. No one was living there, so, when the tax package asked if it was our
primary residence, I answered "no."

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

Maybe, based on your answer and its internal logic, the s/w thought your
residence was investment property. I doubt it would qualify as such, given
the facts you've related.


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)