Capital loss on sale of house

Richard571

Hi -

I am selling a rental house that for some time was my principal residence but I moved our and rented for remainder of time.

I expect to make a €100k loss vs purchase price. To simplify I was living there for 10 years and rented out for 5 years.

Am I correct I can take 1/3 of the loss (I.e the period of time I was renting out of total) to offset against capital gains now (or carry forward loss for future gains).

Thanks for any input.

ismat

That’s correct

Jonathan222

I'm confused by the above.

For example, if I bought a house in 2008 for say 300k and sold it in 2019 for 200k with no negative equity or indeed profit, so the 200k covered the remaining mortgage.The house is a rental (was originally principal primary residence) so I have to complete a yearly form 11.

When I complete my tax returns, for 2019, in 2020, am I allowed to offset any 2019 gains with the 100k loss and if so over how many years?

Thanks.

Marcusm

Richard571 wrote: »

Hi -

I am selling a rental house that for some time was my principal residence but I moved our and rented for remainder of time.

I expect to make a €100k loss vs purchase price. To simplify I was living there for 10 years and rented out for 5 years.

Am I correct I can take 1/3 of the loss (I.e the period of time I was renting out of total) to offset against capital gains now (or carry forward loss for future gains).

Thanks for any input.

Not quite; the last 12 months is always treated as owner occupied (generally a relieving measure but not in your case). Revenue would expect to allow you to use only 4/15 of the loss.

relax carry on

Jonathan222 wrote: »

I'm confused by the above.

For example, if I bought a house in 2008 for say 300k and sold it in 2019 for 200k with no negative equity or indeed profit, so the 200k covered the remaining mortgage.The house is a rental (was originally principal primary residence) so I have to complete a yearly form 11.

When I complete my tax returns, for 2019, in 2020, am I allowed to offset any 2019 gains with the 100k loss and if so over how many years?

Thanks.

If you sold the property for less than you purchased it then you have a capital loss. You may be able uae a portion of it for offset against future capital gains that relates to the time it was wasn't your PPR.

Marcusm

Jonathan222 wrote: »

I'm confused by the above.

For example, if I bought a house in 2008 for say 300k and sold it in 2019 for 200k with no negative equity or indeed profit, so the 200k covered the remaining mortgage.The house is a rental (was originally principal primary residence) so I have to complete a yearly form 11.

When I complete my tax returns, for 2019, in 2020, am I allowed to offset any 2019 gains with the 100k loss and if so over how many years?

Thanks.

The mortgage is irrelevant. The gain/loss is computed by reference to (selling price less allowable selling expenses) minus (purchase price plus allowable purchase expenses plus any expenditure enhancing the property).

Any net gain/loss is attributed between PPR period and non-PPR period.

Large bottle small glass

Two questions on a capital loss.

1. How long does one have to "use" it?

2. I presume it can only be used a future capital gain?

Thank you

Jonathan222

Large bottle small glass wrote: »

Two questions on a capital loss.

1. How long does one have to "use" it?

2. I presume it can only be used a future capital gain?

Thank you

Still reading about this myself but I think its 3 years and yes, future gain only.

nompere

Large bottle small glass wrote: »

Two questions on a capital loss.

1. How long does one have to "use" it?

2. I presume it can only be used a future capital gain?

Thank you

You can carry a capital loss forward indefinitely - until you are able to set it against a capital gain.

You cannot carry it back.

Marcusm

Large bottle small glass wrote: »

Two questions on a capital loss.

1. How long does one have to "use" it?

2. I presume it can only be used a future capital gain?

Thank you

Capital losses are firs offset against capital gains of the same calendar year (which might involve a loss on a November disposal being offset against a fan on a January disposal). Any unrelieved capital losses may be carried forward indefinitely but be warned you need to keep full records until the losses are offset.

Calahonda52

Marcusm wrote: »

Capital losses are firs offset against capital gains of the same calendar year (which might involve a loss on a November disposal being offset against a fan on a January disposal). Any unrelieved capital losses may be carried forward indefinitely but be warned you need to keep full records until the losses are offset.

which means that the timekeeping for records can be much longer than the 6 year normal rule

Large bottle small glass

Just another question.

Assuming a person had a loss from a house sale which was returned properly, can that loss be used against a future inheritance gain from a parent?

Say inheritance is a house valued at 400k and threshold is 335k for CAT and their is an unused CGT loss of 30k; can that be used to offset gain? (I'm guessing no as they are different taxes)

Is the same 30k loss transferable to a spouse who is about to make a CGT gain? (I'm guessing no again 😃)

Xander10

https://www.boards.ie/discussion/comment/119880875#Comment_119880875

A CGT loss cannot be used against a CAT liability, except in circumstances where it's the same property.

Large bottle small glass

https://www.boards.ie/discussion/comment/119881074#Comment_119881074

Thanks.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/if-you-make-a-loss.aspx#:~:text=Transfer%20capital%20losses%20to%20spouse,April%20in%20the%20following%20year.

This seems to suggest a CGT loss can be used against the gain of a spouse. I better check with accountant!

ThreeGreens

A CGT loss can be used against a spouses gain in THE SAME YEAR.

If carrying it forward, then it's only carried forward against your own gains.