Professor

I inherited a house in 2002 (below threshold of taxes) and never owner-occupied it. I rented it out a few times, but finally sold it for $20K less than was declared on the estate closing and current county appraisal.

Can I use this as a Section 1231 loss as an ordinary loss and apply it against my income? I think this is a 'Step-up' or 'Step-down' loss.

Thanks

hornyleprechaun

I'll look into this in an hour or so gotta finish some stuff at work.

hornyleprechaun

I don't think you can because Section 1231 only applies to Business Property. You may still have to report the loss, but you won't be able to deduct against Ordinary Income.

Seek advice from a Tax CPA