Sale of a house that was not my main house or rental property. How to file?

[thegmoe]

Here we go. There is a lengthy backstory in which I was foolish enough to assist my brother with the purchase of his house, following the direction of a real estate agent and broker, because his credit was beyond sub-par (being nice here). Been kicking myself since and now that it is tax time - hopefully the final turn of the blade. I re-iterate, all done under direction of a agent & broker. Be weary of who you trust.

11/2016 - purchased house as sole owner (knowing now - big no no). Never lived there. I actually occupy the second home of my mother's property where i was raised, so I own no prior home. Mortgage payments for were made directly to the bank from my brother and I received no income. My only involvement with the property was my name on the title.

Little of a year later - he falls behind in payments, unable to catch up and following the failed attempt to settle the debt (where I come to learn that it was a no no). Now that I was aware - I refused to state that I lived there when I hadn't. Started working on the sale of the property. Completed in 6/2018.

Details. Original purchase price= $430,000 in 11/2016. Sale price= $490,000 in 6/2018. Per the CLOSING DISCLOSURE - my Closing cost was $24,909 and my Payoff of First Mortgage was $457,942. We were given a check for the remainder which was $7,208 (which I gave to my brother. I know... I'm a fool when it comes to family). I received a 1099-S listing the gross proceeds as $490,000.

How and where do I put all this when filing taxes???? I would appreciate any direction received, with the exception of pointing out my idiocy. Been kicking myself since.

[Anita01 · Accepted solution]

Since you owned this house and it was occupied by your brother, that would be considered as personal use by you for tax purposes  That means you are selling a second home, and the loss on the property is not deductible but any gain is taxable.  The payoff of the mortgage does not count for anything in this transaction.

So, your sale price is the $490,000 minus closing costs, no inclusion of mortgage payoff anywhere.  If part of the closing costs consisted of the payoff of past due mortgage payments, subtract those from the closing costs. You have a taxable gain so far.  Your cost basis is the original cost paid plus closing costs.  Thur purchase closing costs would not include interest paid or principal mortgage payments or property tax.

You enter this by typing Investment income in the Find widow on the upper right, hit enter, then the Jump To.  Choose second home as investment type.

[thegmoe]

Thank you. I appreciate the time to explain that. If I may ask further- how do I translate the info from the 1099-S to the investment input which references a 1099-B.

[Anita01]

When you first enter the investment area, you should check that you did not receive a 1099-b for this information.  The questions will relate to the sale of a second home.

[Anita01]

It actually says 1099-B or brokerage..  They are not referring to a real estate brokerage, so you still say No.

[smenzel]

I, too, have a non-primary/non-rental property sale to report. I'm using TurboTax Premier 2018 and can't locate the FIND window in the upper right that you mention.

[nlewczyk]

I sold 33 and 39 Grote St in Buffalo for 224.000 and bought one in Florida for 247.00 how  do youi report this to my taxes

[Carl]

Been kicking myself since.

Been there. Done that. Got the T-Shirt.  The number one rule I learned from the experience is this:

Friends and family will run you out of business and into the ground and "WILL" "NOT" "CARE".

Based on that lesson, I do not loan money or my credit to friends or family. When it comes to family, they can get as upset as they like. I no longer care about their "feelings". True family will get over it in time. Friends come and go.  Enemies accumulate.

[TomD8]

@nlewczyk --

The fact that you bought a property in Florida is irrelevant to your tax situation.  If your properties in Buffalo were rental properties, following the directions in this TT response:

I sold my rental property. How do I report that? (intuit.com)