Getting some conflicting information from doing my own research, so hoping I'll get something more definitive here. Here's my situation:
– Earlier this year I sold a standalone garage (an investment property) in Moscow, Russia I inherited from my father years ago. Cadaster (registered) value is about $19K. Sale value was $10K, making it, in my mind, a $9K loss, unless I am not allowed to take a loss on a property acquired by inheritance (that's the bit I probably need the most help with, especially given that the sale took place in a sanctioned country).
– I currently hold a stock portfolio with a $15K long-term gain (and a negligible short-term gain, under $300).
Question: am I able to sell off a portion of the portfolio, realizing gains of $9K and wipe those off by the loss on the sale of the garage?
Thanks!
Have capital losses on sale of foreign property – can this offset capital gains from stocks? Need help making a decision.
byu/highlanderfil intax
Posted by highlanderfil
2 Comments
What were you using the garage for? Was it rented? personal use?
ok so inherited property gets a stepped-up basis to fair market value when you inherit it.. that’s the good news. bad news is if the FMV when you inherited was actually $19k and you sold for $10k, then yeah you’ve got a $9k capital loss you can use.
the russia thing makes it complicated though. foreign property sales follow US tax rules for capital gains/losses, but you need to document everything properly. get the exchange rates right for both the inheritance date and sale date, keep all the paperwork translated, etc. i’ve seen people mess this up with international properties and the IRS gets real picky about documentation. also make sure you’re reporting the foreign bank account if the proceeds went there first – FBAR requirements and all that.
for your stock question – yes you can offset capital gains with capital losses, doesn’t matter if one’s from stocks and one’s from real estate. just remember the $3k annual limit for net capital losses against ordinary income if your losses exceed your gains. but in your case sounds like you’d just be zeroing out $9k of gains with $9k of losses, so you’re good there. might want to check if there’s any depreciation recapture on that garage though, even inherited property can have that issue if it was used as a rental before.