These Money Losses Won't Help You at Tax Time

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When American taxpayers suffer a financial loss, they can often take comfort that they'll at least be able to get a tax write-off. But for Hollywood stars Sarah Jessica Parker and Matthew Broderick, news that they had sold their Greenwich Village townhouse in New York City for $750,000 less than they had paid for it isn't likely to give any relief on their tax bills. As millions of homeowners discovered during the housing bust, selling your personal residence at a loss doesn't generate a tax write-off, even though the couple would likely be on the hook for taxes on capital gains if the property had risen in value by $750,000. Capital losses on the sale of a personal residence are just one provision of the tax code that gives no relief to struggling taxpayers. Let's take a look at three other situations in which the tax laws prevent you from claiming the full amount you lose on your tax return.