I am reporting it on Schedule E. TT asks me three questions about the home - Cost, sales price, and expense of sale. For Cost, it specifies to include any loan taken for purchase for the purchase. for Sale Price, it specifies "cash received", and only mentions loans the buyer took on. For "Sales Expense", it does not mention loan payoff. So in my case (not real numbers, but equivalent):
Cost = $320,000 - of which $150,000 was a loan, $170,000 cash
Sale Price + Sold for $460,000, of which 138,000 went to loan payoff, so "cash received" is $322,000
Sales Expense = $12,000 closing costs, commissions, etc.
So my question, is where does the loan payoff go? Do I subtract it from the Sales Price to show cash received, or add it to the Sales Expense?
