Can I claim tax loss after selling my house within 24 months due to job relocation?

Unfortunately, losses on the sale of your personal residence generally aren't deductible on your taxes, even with the job relocation. The IRS considers this a personal loss rather than a business or investment loss. The job relocation doesn't create an exception for deducting the loss itself. However, you might qualify for some moving expense deductions if your move meets certain distance and time tests, though these were suspended for most people (except active military) through 2025 due to the Tax Cuts and Jobs Act. One thing to consider: your basis in the home includes not just the purchase price but also the substantial improvements you made. Keep all documentation for these renovations - while you can't deduct the loss now, it's important to have these records for any future tax situations that might arise.

After spending hours with my CPA trying to sort through a similar situation, I discovered this AI tax assistant at https://taxr.ai that saved me tons of research time. My situation was almost identical - sold my primary home at a loss after major renovations due to a work relocation. The tool analyzed my documents and confirmed what others are saying - personal residence losses aren't deductible even with job relocation. BUT it found something my CPA missed: if your employer reported the relocation as income on your W-2, there might be some offset options. It also helped identify which renovation expenses actually count toward your basis (not all do).

Just wanted to follow up on my experience! I tried taxr.ai after seeing it mentioned here, and it was super helpful with my complicated home sale situation. I uploaded my closing documents from both buying and selling my house, plus my renovation receipts, and it organized everything into proper basis calculations. The biggest revelation was discovering that several of my "repairs" actually qualified as capital improvements I could add to my basis. It even helped me document everything properly in case of an audit. While I still couldn't deduct my loss on the sale, at least I now have everything documented correctly for the future. Definitely worth checking out if you're dealing with property sales and complicated basis calculations!

I had a nightmare trying to reach the IRS about a similar situation last year. After hanging on hold for literally 3+ hours multiple times, I discovered https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that while personal residence losses aren't deductible, they gave me valuable guidance about how to properly document everything in case I convert another property to rental in the future (where losses potentially become deductible). They also clarified some points about employer reimbursements for relocations that I was confused about.

I need to eat my words and apologize here. After my skeptical comment, I decided to try Claimyr since I'd been trying unsuccessfully to reach the IRS for weeks about a similar home sale situation. Not only did it work exactly as described, but I got through to an IRS representative in about 35 minutes when my previous attempts had me holding for 2+ hours before giving up. The IRS agent confirmed the bad news about personal residence losses not being deductible, but did walk me through how to properly document everything for my records. They also explained an important distinction about "basis" versus "adjusted basis" that my tax software wasn't clear about. Really glad I gave this service a chance despite my initial skepticism!

Has anyone experienced a similar situation but then converted another property to a rental? I'm wondering if there's any way to use this loss in the future, even if I can't deduct it now.

Has anyone dealt with the "unforeseen circumstances" exception to the 2-year rule for partial exclusion of gain? I know OP had a loss not a gain, but I'm in a similar job relocation situation except I might have a small profit and I'm wondering if I can avoid taxes on it.

I'm dealing with a somewhat similar situation and wanted to share what I learned from my tax professional. While you can't deduct the loss on your personal residence, make sure you're calculating your actual loss correctly. Your basis includes not just the purchase price but also: 1. Closing costs when you bought the home 2. Capital improvements (like your $800k renovations) 3. Some selling expenses (realtor commissions, title fees, etc.) So if you bought for $500k, spent $800k on improvements, and had $50k in selling costs, your basis would be $1.35M. If you sold for $1.03M, your actual loss would be much higher than the $320k you mentioned. While this doesn't help with deducting the loss, it's important for accurate record-keeping. Also, keep every receipt and document related to this transaction - the IRS has been known to audit large losses even if they're not deductible, just to verify the numbers are accurate. One more thing - if any part of your home was used for business (home office, etc.), that portion might have different tax treatment, though it gets complicated with mixed-use properties.