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IRS.gov Website

Frequently Asked Tax Questions

Capital Gains, Losses, Sale of Home - Losses (Homes, Stocks, Other Property)

  1. Is the loss on the sale of your home deductible?
  2. I own stock which became worthless last year. Is this a bad debt? How do I report my loss?

Rev. date: 12/21/2012

Is the loss on the sale of your home deductible?

Losses on the sale or exchange of personal use property, including a loss on the sale of your home used by you as your personal residence at the time of sale, is not deductible.  Only losses associated with property used in a trade or business and investment property (stocks) are deductible.

Rev. date: 04/09/2013

I own stock which became worthless last year. Is this a bad debt? How do I report my loss?

If you own securities, including stocks, and they become totally worthless, you have a capital loss but not a deduction for bad debt. A stock or other security is treated as becoming totally worthless when it has no value and you must abandon it. To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it.
The worthless securities are: