topic 1099s proceeds from real estate transactions in Deductions & credits

1099s proceeds from real estate transactions

kristanorman78 — Thu, 06 Jun 2019 10:36:44 GMT

What screen do I add this information on? This is due to the Nexus Pipeline taking our property for eminent domain or we get paid for it.

If you get a 1099-S for the sale of a permanent easement...

DS30 — Thu, 06 Jun 2019 10:36:45 GMT

If you get a 1099-S for the sale of a permanent easement

If the payment is less than the basis properly allocated to the part of your land affected by the right-of-way, reduce the basis of your land by the amount received. (No reporting requirement would be necessary in this instance. Just keep a record of this transaction with your tax files.)
If the payment is equal to or more than the basis of the affected part of your land, reduce the basis to zero and you will have a capital gain from a sale

Please refer to this IRS link for more information about the sale of your easement

Click this link for further information about reporting the sale of a capital asset

To enter this as a capital asset sale in TurboTax (for TurboTax Online sign-in, click Here), log into your tax return and type "investment income (gains and losses)" in the search bar then select "jump to investment income (gains and losses)". TurboTax will guide you in entering this information (see step 6 below)

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
Next click on “I’ll choose what I work on”
Scroll down the screen until to come to the section “Investment Income”
Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
The first screen will ask if you sold any investments during the current tax year (This includes any asset held as an investment property so answer “yes” to this question)
Since you did not receive a 1099-B, answer “no” to the 1099-B question
Choose type of investment you sold - select everything else
Some basic information:

Description – Address of property /easement
Sales Proceeds – Your net proceeds from the sale (usually reported on 1099-S)
Date Sold – Date you sold the property (on 1099-S)

Tell us how you acquired the property - Purchased
Enter the your cost basis- Original cost to you plus any capital improvements that you made to the land before the sale to the city.
Date acquired Original date the land was acquired.

Re: 1099s proceeds from real estate transactions

LEK — Tue, 18 Feb 2020 20:12:14 GMT

My question is a little complex. My daughter is 100% disabled. I am her representative payee. She was awarded a $150,000 settlement from a rape case. The money was used to buy her a 5 acre piece of property. We built her a home. She raised her daughter there. My daughter is Bi-Polar. That is her disability. My wife an I maintained the house from 1996 until we sold it in 2019. We put in probably well over $200K in maintaining the house and paying all of the utility bills, power, phone upkeep etc.. My daughter had no way of paying all of the bills. So now what I did was have a Quit Deed signed over to me for $1.00. I then proceeded to begin restoring the house to sell it. For the past 7 years my daughter was housed in a group homes. She was completely mentally incapable of taking care of herself. So now I have a 1099-s for a sale price of $350K. Can I recover the boat load of cash and deduct it from the 1099-s so that i do not wind up paying a huge tax bill?

Re: 1099s proceeds from real estate transactions

DianeC958 — Tue, 18 Feb 2020 20:45:18 GMT

Possibly, you cannot add to the basis of the house the amounts paid for maintenance and utilities, but any amounts paid for remodeling and/or major repairs for the house do add to the basis. Also selling expenses can be deducted.

If you owned the home for at least 2 of the last 5 years and lived there for at least 2 years out of the last 5 years you can exclude up to $500,000 if you are Married Filing Joint or $250,000 if you are Single.

Link to Tax Aspects of Home Ownership

@LEK

Re: 1099s proceeds from real estate transactions

VictoriaD75 — Mon, 29 Jun 2020 12:18:56 GMT

See the link below for instructions on how to enter the 1099-S on your return:

Where do I enter Form 1099-S?