I'm trying to determine if I can take a capital loss for sale of land adjacent to my principal residence.
I found information stating that if I sell land adjacent to my home with my home that the gain on sale would be subject to the $250k/$500k gain exclusion. Conversely, similar to a sale of a principal residence, any loss would be considered a personal non-deductible loss. IRS pub 523 states that a gain would be subject to exclusion of following is met:
Vacant land next to home. You can include the sale of vacant land adjacent to the land on which your home sits as part of a sale of your home if ALL of the following are true.
- You owned and used the vacant land as part of your home.
- The sale of the vacant land and the sale of your home occurred within 2 years of each other.
- Both sales either meet the Eligibility Test or qualify for partial tax benefits, as described earlier.
I'd like to sell the land now at a loss and then sell the home in 2 or so years also at a loss. Do you think I can justify a deductible capital loss on the land sale?
