Yes. You will need to report the sale but you will not have any taxable capital gain if you meet the home gain exclusion.
Because you received a 1099-S for the sale of your primary residence, the IRS will also have received a copy of this 1099-S. Therefore, even though the sale will be exemption if eligible for the home gain exclusion, you will need to report this on your income tax return.
You can take
the gain exclusion as long as you considered the home your "primary
residence" for 2 of the last 5 years. If you have a capital gain from
the sale of your main home, you may qualify to exclude up to $250,000 of that
gain from your income. You may qualify to exclude up to $500,000 of that gain
if you file a joint return with your spouse. See Sale of Your Home for more
information on the exclusion.
If you need to
enter your sale of your primary residence because you received a 1099-S, please follow these steps:
- Once you are in your tax
return (for TurboTax Online sign-in, click Here), click on the “Federal
Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Wages &
Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I’ll choose
what I work on”
- Scroll down the screen until
to come to the section “Less Common Income”
- Choose “Sale of Home (gain or
loss)” and select “start’
- You will want to use the
"Easy Guide" to determine the adjusted basis on this home
Say "yes"
that you sold your main home and TurboTax will guide you on entering this
information. You will need:
- The date you sold your home
and the selling price (from your closing statement)
- The date you bought your home
and the purchase price (from your closing statement)
- The cost of any major
improvements you made, so we can deduct them for you
- Form 1099-C if you sold your
home at a loss (short sale)
Just remember to
check the box to have your home sale reported on your tax return but ONLY if
you receive a 1099-S
