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Investors & landlords
Did you make a profit on the sale? If not, you do not report it at all (unless the closing agent gave you a form 1099-S). The loss on a sale to relatives is not deductible.
If you did get a 1099-S, follow the instructions for sale of a 2nd home. The loss on the sale of a 2nd home is not deductible, whether sold to a relative or not.
For others reading this; "house flipping" is not usually treated as the sale of a 2nd home (sale to a relative is what makes this case different). See https://ttlc.intuit.com/community/tax-credits-deductions/discussion/tax-issues-regarding-flipping-of...
‎January 21, 2020
5:11 AM