Losses (Homes, Stocks, Other Property) (2004 IRS FAQ)

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IRS FAQ 10.4 Capital Gains, Losses/Sale of Home: Losses (Homes, Stocks, Other Property)

Is the loss on the sale of your home deductible?

The loss on the sale of a personal residence is a nondeductible personal loss.


I own stock which became worthless last year. Can I take a bad debt deduction on my tax return?

If you own securities and they become totally worthless, you can take a deduction for a loss, but not for a bad debt.

The worthless securities are treated as though they were capital assets sold on the last day of the tax year if they were capital assets in your hands. Report worthless securities on line 1 or line 8 of Form 1040, Schedule D (PDF), whichever applies. In columns (c) and (d), write "Worthless." For additional information, refer to Publication 550, Investment Income and Expenses (Including Capital Gains and Losses). For more information on bad debts, refer to Bad Debt Deduction, Bad Debt Deduction.


Source: IRS.gov

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