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If you get a 1099-S for the sale of a permanent easement
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:
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?
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
See the link below for instructions on how to enter the 1099-S on your return:
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