Owen and Polly have been married for three years.Owen sells investment property to Polly for a realized loss of $140,000.Owen's loss of $140,000 is disallowed and Polly's basis for the property she purchased is her cost.

Question

Quizplus · Accepted Answer

According to IRS rules, if a property is sold between spouses, the loss cannot be claimed on taxes. Therefore, Owen's loss of $140,000 cannot be claimed as a tax deduction and Polly's basis for the property she purchased is still Owen's original basis.

Owen and Polly Have Been Married for Three Years