We cashed in $700k worth of stock to buy our retirement house. Do i have to declare the money as normal income?

 
AnnetteB
Intuit Alumni

Retirement tax questions

If you cashed in or sold stock for the purchase of a home, then you will need to include those stock sales as income on your tax return.  Whether the income is “ordinary” income or “capital gains” will depend on what type of account held the stock when it was sold. 

If the stock was held in an after-tax brokerage account or was simply certificates that you personally held, then the sale will be reported on Schedule D and it will be taxed as capital gains if it was sold at a gain and not a loss.  The brokerage will send you a Form 1099-B with information you need to report the sale on your tax return.  Your cost basis in the stock will be taken into account when you report the sale and the entire proceeds may not be taxable to you. 

If the stock was held within a retirement account, sold, and then the proceeds were distributed to you, then you will receive Form 1099-R that will be used to report the income on your tax return as ordinary income.


View solution in original post

Retirement tax questions

Thanks! I thought that was the case, but I'm glad for the confirmation!
AnnetteB
Intuit Alumni

Retirement tax questions

Happy to help!