Investors & landlords

You should report the IRS form 1099-S but report the amount of the cost basis on IRS form 8949 as the same as the proceeds of the IRS form 1099-S.

You will report a net $0 income on your Federal 1040 income tax return.

IRS form 1099-S Proceeds from Real Estate Transactions may report:

• Your main home, 
• A second home, 
• A vacation home, 
• Land,
• Residential rental property, or
• Real property recorded as a business asset.

The tax treatment of each of these transactions differ. Sale of a second home, an inherited home or land are considered investment sales.

In TurboTax Online Premier, follow these steps to report the sale:

• Click on the Search magnifying glass and enter sale of second home.
• Click on the Jump to sale of second home link.
• Click on Add investments.
• At the screen Let's import your tax info, click on Enter a different way.
• At the screen OK, let's start with one investment type, select Other and click Continue.
• At the screen Tell us more about this sale, enter the name.  Click Continue.
• At the screen Now, enter one sale….., enter the information.  
• At the box Fair market value when previous owner passed away, enter the same dollar amount of the Proceeds.
• Click Continue.
• At the screen Let us know if any of these situations apply to this sale, answer None of these apply.  Click Continue.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

Retain copies of all the paperwork associated with the second home in your tax papers.  It is possible that a tax authority will contact you at a later time and ask about the IRS form 1099-S income.

@AC1919

[Edited 02/23/25 | 3:10 pm PST]