Capital Gains Offset on House Sale I know that if I sell a home for less than I paid for it (plus any legitimate improvements), there are no capital gains (or other taxes) that I must pay on my Federal or California income tax.
However, what I'm getting conflicting answers on is a question regarding the following scenario: Suppose I paid $400,000 for my home, added $50,000 in qualifying improvements, but it sells for only $390,000 (i.e. even with the improvements added in, I still take a loss on the sale).
Question: Does that $60,000 difference ($400K + $50K - $390K) benefit in any way as far as reducing my tax liability, or does it just preclude any tax liability arising from the house sale. I ask this because I need to know if there's any point in keeping track of the improvements, if they don't result in an additional tax-reducing benefit. Thanks for any assistance you can provide . . . |