My husband and I bought a condo for $120,000 and five years ago, when it was worth $60,000, we converted it to rental property. Now we’re selling it for $50,000 just to get out of this mess. What’s our tax loss?

While you clearly have an economic loss, tax rules prevent you from deducting the decline in value from your $120,000 purchase price to the value at the time you converted the condo to rental property. What’s more, depending on the amount of depreciation claimed on the condo from the time of conversion, you may actually have a tax gain (even though you have a financial loss). Talk with a tax pro to run the numbers in your situation.