topic Do we file a 1099-S? in Get your taxes done using TurboTax

Do we file a 1099-S?

sammypaige — Fri, 31 Jan 2025 08:31:01 GMT

Hello. My wife and I sold our house last year and had some confusion about the 1099-S. At closing we both received information sheets about the 1099-S that my closing agent crossed out and wrote “exempt” on them. Also, they included 2 sets of the 1099-S addressed to each spouse titled “copy A, B, C” and the sales price was distributed between us equally on them. Do we have to file them if we’re exempt?

Also, we plan to file separately and to make things even more confusing I owned and lived in the home for 4 years while she moved in last year after we got married, so is she even technically exempt? It's considered marital property in Minnesota.

Re: Done we file a 1099-S?

KeshaH — Fri, 31 Jan 2025 13:43:15 GMT

If the closing agent wrote exempt on the 1099-S form, this could mean that the sales price of the house was less than $500,000 and the home was your principal residence, which means that you and your wife may qualify to exclude the gain on the sale of the home. You would be able to exclude up to $500,000 of gain ($250,000 on each of your returns since you are filing separately) if you:

- owned the home at least 2 of the last 5 years before the date of sale (ownership test)

- used the home as a primary residence at least 2 of the last 5 years before the date of sale (use test)

- haven't excluded the gain from another home sale in the last 2 years

For both of you to qualify for the full exclusion, only one of you has to have met the ownership test and both of you have to have met the use test.

To report the sale of the home and the exclusion in TurboTax:

- log into your TurboTax account

- on the Tax Home screen, click Income & Expenses and then Add/Edit or Work on Other Income

- on the income summary screen, scroll down to Less Common Income and click Start or Edit next to Sale of Home

- go through the prompts to provide information about the home that you sold and the information from the 1099-S and settlement paperwork

- on the screen that asks if you lived in the property at least 24 months out of the last 5 years, select the appropriate answer (these months do not need to be consecutive)

- continue through the remaining screens to report the sale of the home and exclusion if you qualify

Re: Done we file a 1099-S?

sammypaige — Fri, 31 Jan 2025 17:26:16 GMT

Thanks! So, if my wife moved from her primary residence in WI last year after we got married, she will not qualify for the use test? Unless we are able to file jointly?

Also, the closing date on the forms is incorrect. As we later changed it because the banks were closed the date on the forms. Do I put the incorrect or correct date?

Re: Done we file a 1099-S?

DianeW777 — Wed, 05 Feb 2025 15:32:29 GMT

Yes, she would qualify if you filed jointly. If she did not meet the use test, meaning she lived in it as her main home for 24 months of the last five years, then she would not qualify on a married filing separately return.

Use the correct closing/sales date on your return.

@sammypaige