Yes, report it on your income tax returns.
Per IRS Publication 544 , chapter
4, Reporting Gains and Losses: Loss from the sale or exchange of property held
for personal use is not deductible. But if you had a loss from the sale or
exchange of real estate held for personal use for which you received a Form
1099-S, report the transaction on Form 8949 and Schedule D, as applicable, even
though the loss is not deductible.
Where do I enter Form 1099-S?
