Can I write off a loss on a house flip?

[Matthew Tyer]

Let me start out by saying, this is my first investment property and I have learned a lot about the whole process. I bought it this year and originally I wanted to do the BRRRR method on it but now I just want to get out from under it. It ended up needing way more in repairs than what I anticipated and I should have done more research on the market area to make sure I was in a good selling price point. That being said I am anticipating that I will either (1) break even or (2) have a small loss on my hands (<15k) it just depends on what I can sell the home for. My question is, if I do incur a loss on the property can I just claim it on at 1040 form or will It just lower my personal W2 taxable income? If this happens I will not show any profit for 2021. My business is in an LLC also and this is my first year in business. I know you can claim a loss for the first 3 years in business. I am very organized and have been keeping very good track of my expenses for the home so I will end up knowing my EXACT loss if it should happen.