Short sale, but paying off loan instead, way to deduct on taxes? (credit, charge)

[Checkered24]

Here is the situation,

My fiance is selling a house that is $20,000 under water. The loan, a home equity line of credit, has been charged up to $49,000. Sale price is $30,000.00.

To avoid going through the short sale process, we plan on paying the $20K difference out of pocket at closing.

Since this is such a loss on the property, I was wondering if there was a way to do this where the loss, or part of it, would be deductible from our taxes at year end. (We will be married in March).

Any chance of this loss being deductible from federal taxes?

Thx!

[mathjak107]

Originally Posted by Checkered24

Here is the situation,

My fiance is selling a house that is $20,000 under water. The loan, a home equity line of credit, has been charged up to $49,000. Sale price is $30,000.00.

To avoid going through the short sale process, we plan on paying the $20K difference out of pocket at closing.

Since this is such a loss on the property, I was wondering if there was a way to do this where the loss, or part of it, would be deductible from our taxes at year end. (We will be married in March).

Any chance of this loss being deductible from federal taxes?

Thx!

no you cant write off a loss on a personal residence. the flip side is your not taxed on 250k of gains either if single or 500k if married.

[Checkered24]

Ok, thanks!