I am a US citizen residing in Canada. All my income is from Canada. I am selling my home in South Carolina for a loss. I am reporting the loss on my US 1040. I have never rented the home out and it was my prime residence for 3 years until my move to Canada in July 2003. It has been vacant till sale in March 2006.
Questions:
1. Do I need to file a SC state return showing the loss? Or for any other reason?
2. Is there any recapture of previously deducted mortgage interest on the sale of the home.
US CITIZEN, RESIDENT IN CANADA, SELLING SOUTH CAROLINA HOME
Moderator: Mark T Serbinski CA CPA
Unless you can benefit from the loss, I see no reason to report it in SC. SC may have some reporting rules, however.
There is no mortgage interst recapture.
You realize that for Cdn tax purposes, you need to have an evaluation from 2003, to determine the eligible loss for the period you were in Canada,.not the entire loss. Also, CRA may deny you the capital loss asthis was not an investment. Claim it and see.
There is no mortgage interst recapture.
You realize that for Cdn tax purposes, you need to have an evaluation from 2003, to determine the eligible loss for the period you were in Canada,.not the entire loss. Also, CRA may deny you the capital loss asthis was not an investment. Claim it and see.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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Norbert Schlenker
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Re: US CITIZEN, RESIDENT IN CANADA, SELLING SOUTH CAROLINA H
[quote="bigrandy"]I am a US citizen residing in Canada. All my income is from Canada. I am selling my home in South Carolina for a loss. I am reporting the loss on my US 1040. I have never rented the home out and it was my prime residence for 3 years until my move to Canada in July 2003. It has been vacant till sale in March 2006.[/quote]
What makes you think that you can "report a loss" on a residence on a 1040? Losses on primary residences are not deductible.
What makes you think that you can "report a loss" on a residence on a 1040? Losses on primary residences are not deductible.
Norbert, all US property sales are reportable on 1040. Whether or not the gain/loss is taxable/usable depends on many factors.
Brandy didn't ask about reporting loss on 1040. I did mention that teh loss may have bno benefit.
For Cdn purposes, the home was never her principal residence.
Brandy didn't ask about reporting loss on 1040. I did mention that teh loss may have bno benefit.
For Cdn purposes, the home was never her principal residence.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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Norbert Schlenker
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Nelson, all property sales are NOT reportable on a 1040. Look at Worksheet 2 in Pub 523. It says clearly, "If the amount on this line is zero, do NOT report the sale or exclusion on your tax return." If the house fits under the guidelines, the IRS does not want to know.
The original poster says clearly that it was his/her primary residence for 3 years prior to the move to Canada. That makes the sale exempt under the Code. If s/he had had a gain, it wouldn't be reported. Since it's a loss, it's not reported either.
P.S. Is BBCode ever going to be turned back on so we can link to things or quote or italicize?
The original poster says clearly that it was his/her primary residence for 3 years prior to the move to Canada. That makes the sale exempt under the Code. If s/he had had a gain, it wouldn't be reported. Since it's a loss, it's not reported either.
P.S. Is BBCode ever going to be turned back on so we can link to things or quote or italicize?
If she had a gaan, and had not lived in the house for MORE than 3 years, the gain would indeed be taxcable.
For a property to be tax-exempt in US, it must have been one's residence for 2 of the last 5 years, which, in this home's case, it was not.
Again, unlike canada, the sale of principal residences (whether current or former) ARE reportable, unless certain criteria are met. The vast majority of sales meet these criterai, but -- as in this case -- not all.
For a property to be tax-exempt in US, it must have been one's residence for 2 of the last 5 years, which, in this home's case, it was not.
Again, unlike canada, the sale of principal residences (whether current or former) ARE reportable, unless certain criteria are met. The vast majority of sales meet these criterai, but -- as in this case -- not all.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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Norbert Schlenker
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"For a property to be tax-exempt in US, it must have been one's residence for 2 of the last 5 years, which, in this home's case, it was not."
The house was sold in March 2006. Five years back from that is March 2001. It was bigrandy's residence from March 2001 through July 2003, which is more than 2 years. Any gain up to $250k ($500k if MFJ) would be exempt and hence not reportable.
The house was sold in March 2006. Five years back from that is March 2001. It was bigrandy's residence from March 2001 through July 2003, which is more than 2 years. Any gain up to $250k ($500k if MFJ) would be exempt and hence not reportable.
Ah, missed the march 2006, thought it was 2007. Just got in in under the wire.
And to clarify, the US does indeed take the same position as canada, that a 'personal residence' cannot qualify as a loss. The term 'personal residence' goes beyond the concept of 'principal residence' or 'main home', to encompass any real property that was never rented out or used for business purposes.
So, no reporting anywhere: not in US because it was your main home 2 of the 5 years before sale, and not in canada because it was personal property that was sold at a loss. CRA *might* question you about the value in July 2003 in order to confirm that the loss occured after moving to canada rather than before.
A better pair of glasses would have avoided much of the banter on this thread, so I apologize to Norbert and bigandy.
And to clarify, the US does indeed take the same position as canada, that a 'personal residence' cannot qualify as a loss. The term 'personal residence' goes beyond the concept of 'principal residence' or 'main home', to encompass any real property that was never rented out or used for business purposes.
So, no reporting anywhere: not in US because it was your main home 2 of the 5 years before sale, and not in canada because it was personal property that was sold at a loss. CRA *might* question you about the value in July 2003 in order to confirm that the loss occured after moving to canada rather than before.
A better pair of glasses would have avoided much of the banter on this thread, so I apologize to Norbert and bigandy.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best