sold home to our son without any gains on home sale?

[sonnliz]

Last year, we had our son, and his wife took over the primary house we have in Texas.  We did not gain any extra income from the transfer. We basically wanted to refi the house into his name, however, we were told that it has to be a sale in order for our son and his wife to own the house.  So, we sold the house to him and his wife, in the amount of whatever was the balance remaining on our mortgage to pay it off.  I have not so far received any tax document regarding the sale. I read that normally when there's a gain in selling a house, you will receive a 1099-S which we have not since there was no extra income gain, do we need to report this to the IRS? If so, what section in the Turbo Tax we do.  We only received the usual 1098 document from our mortgage company nothing else.  In reviewing the closing documents, there's a form called substitute Form 1099-S Proceeds from Real Estate Transactions.  The Gross Proceeds amount is the same as the Allocation of Gross Proceed, not sure what this means.  

[ColeenD3]

Your gain is calculated by contrasting the basis with the sales price. If you sold it for more than you purchased it, you have a gain. If you made any improvements, they are added to the purchase price. You must report any gain, regardless of whether or not you received a 1099-S or not.

Your mortgage has nothing to do with it. If you did have a gain, you might qualify for the exclusion.

Steps for reporting sale:

• 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
• Scroll down to Less Common Income
• On Sale of Home (gain or loss), click the start or update button

[sonnliz]

Hi Colleen, thank you for responding to my inquiry.  However, there was no gain on this transaction, do we still need to report this to the IRS?

[ZoltanB45]

If you didn't receive a 1099-S and you qualified for the exclusion and the gain was less than the exclusion, you would not need to enter it in either. The fact that you did not have any gains at all, you can definitely omit the sale.

[davej]

I have a similar situation.  Turbo tax tells me two different things on if it is an installment sale or just seller finance interest. I am confused.  Below is the exact situation.

Wife and I sold our home in 2022 for 360K and carried a 180 K deed of trust for 7 years.

There was zero gain and we should be clear with the 500K exemption and just pay tax on the interest for the loan yearly.

I bought turbo tax early and maybe it is not updated?  Please advise!  Thank-you !