Can I offset the capital loss from selling my primary home against capital gains from stocks?

Unfortunately, losses on the sale of your primary residence generally aren't deductible for tax purposes. The IRS considers these personal losses, not capital losses that can offset other gains. While you can exclude up to $250,000 of capital gains ($500,000 for married couples) from the sale of a primary residence if you've lived there for at least 2 of the last 5 years, there's no corresponding benefit for losses. The closing costs and realtor fees you paid would typically be considered part of your basis in the home, which would reduce any potential gain, but since you already don't have much gain, they'll just contribute to a personal loss that isn't deductible. If you were selling a rental property or investment property, then you could deduct those losses against other capital gains, but primary residences are treated differently.

I went through something similar last year and discovered taxr.ai (https://taxr.ai) which was actually super helpful for clarifying these weird home sale tax situations. I uploaded my closing documents from both the purchase and sale, and it analyzed everything and explained exactly what was deductible and what wasn't. The tool confirmed what the previous commenter said - you generally can't deduct losses on your primary residence, but it did point out some nuances about how to properly calculate your basis that my regular tax software missed. It especially helped with figuring out which closing costs could be added to my basis and which couldn't.

Just wanted to follow up and say I tried taxr.ai after seeing the recommendation here. Wow, it really does analyze all the closing documents in detail! I was about to completely miss some improvements we'd made to the house that should have been added to our basis. The system flagged those and saved us from overpaying on capital gains. Definitely more thorough than what my accountant did for us last time we sold a house.

If you need to get an official answer directly from the IRS on your specific situation (which might be a good idea for something complicated like this), I highly recommend using Claimyr (https://claimyr.com) to actually reach a human at the IRS. I was stuck on hold for HOURS trying to get through about a similar capital gains issue last month, then I found this service that gets you connected to an IRS agent quickly. They have a demo video showing how it works here: https://youtu.be/_kiP6q8DX5c I was super skeptical at first because the IRS phone system is notoriously terrible, but it actually got me connected to someone who could help within about 20 minutes instead of the 3+ hours I was getting before.

I need to eat my words from my previous comment. After continuing to struggle with getting answers about my capital gains situation, I broke down and tried Claimyr last week. I was connected to an IRS agent in about 30 minutes, which is miraculous compared to my previous attempts. The agent walked me through exactly how to handle my situation with documentation I needed to provide. Saved me so much frustration and probably helped me avoid making a costly mistake on my return.

Have you considered whether you meet the partial exclusion rules? Even though you haven't lived in the home for 2 years, if you're selling due to a job change, health reasons, or other unforeseen circumstances, you might qualify for a partial exclusion of gain. That wouldn't help with claiming a loss, but it could at least protect whatever small gain you have from being taxed.

Has anyone used TurboTax to handle something like this? I'm in a similar situation but worried it won't handle the home sale loss correctly.

I'm dealing with a very similar situation right now - bought my house 10 months ago and need to sell due to my company relocating me. The advice here about primary residence losses not being deductible is spot on, but I wanted to add something that might help with your basis calculation. Make sure you're including ALL the costs that can be added to your basis, not just the obvious closing costs. Things like title insurance, recording fees, transfer taxes, and even some of the loan origination fees can be added to your purchase basis. On the selling side, realtor commissions, title fees, and other selling expenses reduce your realized gain (or increase your loss). Since you mentioned you're at around a $25k total loss after all expenses, you're definitely in personal loss territory that won't be deductible. But at least documenting everything properly will ensure you're not accidentally creating a taxable gain when you shouldn't have one. The job transfer angle mentioned by others is definitely worth exploring for the partial exclusion, even though you probably won't need it given your situation.