I sold a vacation home for less than I purchased it for. Do I need to report the sale? Can I deduct the loss?

Yes, you need to report it.   Instructions to report it are below.  If you sold a home that you use as a rental or investment property at a loss, you may be able to deduct it as a loss.   

• You can figure out if you've got a tax loss by comparing the sale price to your property's tax basis, which includes the original purchase price, improvements, and depreciation deductions.
• If you acquired the property through a Section 1031 like-kind exchange, your tax basis might be lower than expected, which could lead to a gain instead of a loss.
• If your rental property was held for more than a year and you sell it at a loss, it can typically qualify as a Section 1231 loss. This can offset various types of income, like salary and capital gains.
• A significant Section 1231 loss might result in a net operating loss, which you can carry back to offset past taxable income or carry forward to offset future income.

See Selling Real Estate

I sold my rental property. How do I report that?