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Discussion:Vacation/Rental turned to 100% Vacation home then sold

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Discussion Forum Index --> Tax Questions --> Vacation/Rental turned to 100% Vacation home then sold


Malpers (talk|edits) said:

9 January 2007
client has vacation home that was rented for several years with passive rental carryforward losses due to high income. He now wants to convert it to purely second home/vacation, and then eventuallly sell it without it ever being primary residence for home exclusion.

Does he lose the passive loss carryforward upon conversion from rental/vacation home to pure second home? Or can they somehow be taken in the sale by reducing the basis when the now 100% vacation home is eventually sold?

Thank you

Solomon (talk|edits) said:

9 January 2007
Passive loss retains its character. Sec. 469(f).

FTF65 (talk|edits) said:

January 9, 2007
The losses will be deductible (i.e., treated as non-passive losses) in the year that you sell the home, provided that you sell your entire interest in the home and that you sell to an unrelated party. Sec. 469(g).

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