Profits from sale of secondary home

Forum|Forum|2 years ago
June 2, 2024
3 replies
0 views

Hello everybody , need advice on how to deduct on Turbotax the mortgage of a house I sold last year . I received a 1099 from the title company that I sold the house for $340,000 and when I input this in my Turbotax it calculates it as full income/profit , but out of the 340 K the mortgage company got paid about 170 K so my actual profit is only 170 K .How do I set this up in Turbotax so that I don't get taxed at 340 please ?

M-MTax

Level 15

Your mortgage payoff isn't part of your gain computation so disregard it.

Sales price minus your basis = your gain

How much you netted after your mortgage was paid off doesn't matter for tax purposes.

Mike9241

Level 15

also, certain closing costs/selling expenses further reduce any taxable gain.

M-MTax

Level 15

also, certain closing costs/selling expenses further reduce any taxable gain.

As would the cost of any improvements made.

rjs

Level 15

@ricardojigmond wrote:

my actual profit is only 170 K .

@ricardojigmond

Your actual profit is $340,000, minus the following:

the amount you paid for the house when you bought it (the total purchase price, including what was paid by the mortgage loan, not just the down payment or the amount of cash that you put up)
the cost of any improvements that you made (but not repairs)
selling expenses, such as a broker's fee

Paying off the mortgage does not reduce your actual profit.

If you ever rented out the house or used it for business there are additional considerations.

ricardojigmondAuthor

Level 2

But how do I declare that on my 2023 tax statements , as for now it only shows the 1099 for 340 K as full gains and makes me pay a lot of taxes for something I did not really gain ?

DoninGA

Level 15

You enter it as an investment sale.

To enter an investment sale other than from a brokerage account (1099-B), follow the steps below.

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Under Investment Income
On Stocks, Cryptocurrency, Mutual Funds, Bonds, Other, click the start or update button

Or enter investment sales in the Search box located in the upper right of the program screen. Click on Jump to investment sales

On the next screen click on Yes
On the next screen click on Other and continue
Enter a Name and continue
Where asked about Type of Investment select Second home