Purchasing or Selling a Beach Home in Florida

In a recent Tax Court Memorandum decision (TC Memo 2015-95), a married couple was not entitled to deduct a loss on the sale of a seasonal home because the residence was not acquired in a profit-motivated transaction nor was it subsequently converted to an income-producing rental property.  This resulted in a nondeductible personal loss when it was sold for less than its original cost.

In addition, rental expenses claimed by the taxpayers were disallowed because the couple did not make a bona fide attempt to rent out the property, even though the taxpayer claimed he contracted a realtor to actively solicit the property for rent.  The taxpayers were also liable for accuracy-related penalties with respect to the understatement of tax for each year.

The tax rules related to seasonal and vacation homes can be very complicated.  For more information on purchasing, selling or renting a vacation home, please consult with your Schneider Downs representative. Also, please visit our Real Estate blog for more articles on related topics.

 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2024 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Tax, Tax Policy BY Kirk Mitchell
Summary of President Biden’s 2025 Revenue Proposals Released in Treasury’s Greenbook
The Importance of Certified Business Valuation Professionals
Tax, Tax Impact BY Jared Sofranko
IRS Tax-Exempt and Governmental Entity New Compliance Programs
Tax BY Brianna Lundy
Employee Retention Credit: IRS’s Voluntary Disclosure Program Expiring on March 22, 2024
Pillar Two is Here; Is Your Company Ready?
Not-for-Profit, Tax BY Sarah Piot
Not-For-Profit Tax Credit Opportunities Included in the Inflation Reduction Act
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Pittsburgh

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×