The details below will provide the guidance you need. Since you didn't report gain or loss on the repossession make sure you don't increase the basis now for any gain that was not taxed in 2010, when the repossession took place.
If you had a repossession, generally you might have to report a gain, which gets added to your basis in the property. You costs of repossession also get added, coming to a new basis in the property. Once you determine your new basis, then you can report the second sale for cash in 2017.
The IRS discussion of "repossession" generally are here: Publication 537-Installment Sales
- It's important to focus on the section that applies to you because they are handled differently.
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Personal Property: Tangible and Intangible property other than real property
- Tangible: Anything you can see, feel or touch
- Intangible: Anything that carries a value, but in and of it self is worthless (ex., a dollar bill or a stock certificate)
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Real Property: Land, building and building structural components
Once you have the figures you need you can report the repossession in the original section.
You report gain or loss from a repossession on the same form you used to report the original sale in TurboTax (likely Schedule D).
• indicate in the Installment Sale that the last payment was received on this installment sale in (year 2010).
• Use the IRS worksheet to calculate your gain or loss on repossession and the IRS worksheet to calculate your basis in the repossessed property. (Use the link above for the worksheets)
• Once the gain or loss has been calculated go to the Investment section of Turbo Tax.
• Select start next to Stocks, Mutual Funds, Bonds and Other.
• Respond No to statement 1099B
• Enter the information under Other Sale. Be sure to select Everything Else to report the
You can use the same procedures to enter the second sale with your new cost basis from the worksheet.
