We had a rental property in Hawaii with a little house that was completely covered by lava in May 2018. There was no insurance (premiums = 20% of house value). The state has appraised the property down to $0 and is no longer charging property tax. Where can we use this loss as a deduction? What line? And can we use both the house and the land as a total loss - technically we still own the "land", however it is more than likely going to be worthless and uninhabitable for many decades.
You would claim the loss of a Rental Asset as a Terminal Loss on the T776 Statement of Real Estate Rentals. Indicate that the Class 1 building asset has been disposed of for $1. The remaining balance in the Class will be the amount of terminal loss on line 9948.
The land will be disposed of on the Schedule 3 and will result in a Net Capital Loss which can only be used to reduce past Capital Gains (3 years), current year gains or future (indefinite) gains.
You would claim the loss of a Rental Asset as a Terminal Loss on the T776 Statement of Real Estate Rentals. Indicate that the Class 1 building asset has been disposed of for $1. The remaining balance in the Class will be the amount of terminal loss on line 9948.
The land will be disposed of on the Schedule 3 and will result in a Net Capital Loss which can only be used to reduce past Capital Gains (3 years), current year gains or future (indefinite) gains.
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