1099-S Proceeds for Home Sale after a Divorce

[blackstone79]

My wife and I are getting a divorce.  as part of the divorce, I got 75% of the net of the home sale, and she got 25%.   For the proceeds on the 1099s (the total sale), the originally gave us two 1099-s that reported 50% each of total sale.   Is this correct?  Or should the 1099-s report 75% of the total sale for me and 25% for her?  We owned the home for less than a year.

[KeshaH]

You should have been asked how the gross proceeds were to be allocated and the 1099-S should have reflected that allocation. You'll need to request that the issuer provide a corrected copy of the 1099.

[blackstone79]

They offered to allocate however we want and send corrections.  What should it be?  thank you for the quick reply!

[KrisD15]

Can you please re-phase your last comment? It seems a little confusing. 

Are you waiting for a corrected Form 1099-S or will you allocate the sales proceeds yourselves?

[blackstone79]

wow.  you guys are great how quick you answer.

Does this help clarify:

1. we sold the home, I was given 75% of the net proceeds, and my wife 25% of the net proceeds, per the terms of our divorce.

2. we were both issued separate 1099-s forms that reported 50% of gross for her and I.

3. Question: What should the 1099-s actually have reported?  Should it have reported 75% of gross for me and 25% of gross for my wife?

4. The settlement company offered to change the 1099-s to whatever we want. 

Thx! 

[DavidD66 · Accepted solution]

You should take the settlement company up on their offer to issue you corrected Forms 1099-S.  That will make reporting the home sale on your tax returns a lot simpler.   The Forms 1099-S should reflect what you actually received.  

Since you owned the home less than a year, any gain on the sale is taxable.  Be sure to adjust (reduce) your sales proceeds for any costs you incurred to sell the home.