Anna sold her primary residence for $950,000. She originally paid $750,000 for the property four years ago. She spent $300,000 on capital improvements during her ownership. What can Anna write-off when filing her tax return?

First, determine the amount of the capital gain or loss. $750,000 purchase + $300,000 improvements = $1,050,000 adjusted basis. A sale price of $950,000 creates a $100,000 capital loss. However, capital losses are not permitted on a primary residence.