Foreclosure

• If your primary home is foreclosed upon and you receive less than the adjusted basis for the home, you can claim the difference between what you receive and the adjusted basis as a loss and write it off. Adjusted basis is the cost you paid for the home plus certain improvements. Not all home improvements count toward your basis.
  
  

Involuntary Conversion Losses

• Involuntary conversion losses are losses you have because your property is damaged, condemned, or stolen and you received money or property as compensation. These losses are deductible as long as the property is not your main home. If the property was for personal use, the losses are only deductible if the conversion was the result of casualty or theft.
  
  

Rental Business Losses

• If you have rental properties and your rental business operates at a loss — perhaps you lose a renter or have some major repair that prevents someone from renting the house — you can claim a business loss as a tax deduction under some circumstances. You must be materially involved in the business and not just own the properties and receive rents as passive income.
  
  

Loss on a Sale

• If you have a property that is a business or rental property and you sell the property at a loss, you can claim that loss as a deduction under most circumstances. If, however, the property began as your primary residence and was then converted to a business or rental property and the adjusted basis was higher than the fair market value of the property at the time of conversion it may limit how much you can deduct.