I enter Gross Proceeds on a 1099-s from the sale of investment property. Where do I enter the cost of sale (commission) to enable the calculation of Net Proceeds

[pk]

@beekeeper  when you tell TurboTax  that you have  sale of investment / rental property , it would walk you through filling of all the components of the  gain/loss computation --- Basis ( acquisition cost plus cost of improvements ), Sales  Price , Sales expenses ( commission, title insurance, fees, transfer tax etc, sales prep . etc. etc. ), accumulated depreciation etc.

Are you using desktop version or on-line   ( even though they work pretty similarly ) ?   You have to go through all the screens  -- the order of data collection  may be different .   At least last year it was a tabular entry .   

Tell me where in the entry stream are you and I can perhaps walk you through the screens  ( if you are a windows  desktop version only ) , else  give me more specifics as to  where you are .

[beekeeper]

My thanks for the quick response. I am using TurboTax on-line and here is the flow I am using for entry:

> Select - Federal: Income and Expenses

> Select - Stocks, Mutual Funds, Bonds, Other

> No to receiving a 1099-B

> Entered the name of the financial institution that brokered this sale

> Entered the following on "Now we’ll walk you through entering your sale details"

-  Type of investment: "Land (Other investment purpose)"

- How did I receive: "I purchased it"

- Entered a description of the property

- When did you receive this investment? "entered purchase date in 2005"

- Date sold or disposed "entered date of sale in 2019"

- Proceeds: "Entered the Gross Proceeds indicated on the 1099-S" (note this included cost of sale such as sales commission)

- Total amount paid: "entered the purchase price for the property"

> I check the box: "I have more info to enter that I don’t see here:I have more info to enter that I don’t see here";but only the following is shown (none are applicable):

Accrued market discount

Wash sale loss disallowed

Federal and State income tax withheld

If I "continue" there are no other fields to be completed

NOTE: when I click on the learn more for the "Proceeds" field; the following is displayed:

"In most cases, your proceeds amount already has fees and commissions subtracted out of it, but if it doesn't you should enter them later when we ask about any sales expenses."

In my case the proceeds on the 1099-S include fees and commissions and TurboTax never asks me about "Any sales expenses"

I appreciate any insight you might have as I just am unable to find where to enter the "Sales Expenses"

[ColeenD3 · Accepted solution]

You can add the sales expenses to the purchase amount yourself. That is what the program would do with a separate place to enter them. This amounts to the "adjusted basis" of the property.

[pk]

@beekeeper , while I agree with @ColeenD3  that the  final result  ( taxwise ) can be achieved that way , but I believe  you are entering the 1009-S in the wrong area --- assuming that this was real-estate ( thus a 1099-S )  you should be entering this under  sale of home / real-estate  ---

In  TurboTax Home & Business ( I have only access to downloaded version  -- but on-line should be the  substantially similar:

They have changed the entry process  for this  ( compared to 2018 -- there is a bounce between  personal income and business income  but eventually the entries are  in "business income and expenses "  "I'll choose what I work on ",  "other less common income situations" "sale of business property" and  follow on screens.  The tabular entry of the  sales costs  has now been eliminated and actually added to the  " cost or other basis of the property  --- this is what  line 21 on the "enterable" form  4797  says.   SAo yes therefore Turbo Tax will not ask for  sales expenses  --- also help note  are the same as before  i.e.  cost basis  is defined as  acquisiton cost + cost of improvements + un-reimbursed casualty loss etc.    So yes there is a problem here .  Sorry

that is my take on this  -- thank you for your patience and for bring this  to this board

pk

[beekeeper]

My thanks for the quick responses and I have reviewed both options suggested and went with the one by ColeenD3 for the following reason;

In TurboTax online: "Sale of Business Property" is found under "Other Business Situations". When I select "Sale of Real Estate" the guidance from TurboTax indicates that this is for situations where "Payments are received over two or more years". This was not the case for me as full payment was made in 2019.

[mbureau747]

What if the Gross Proceeds has already been filled in by the Filer who supposedly sends the form 1099-S to the IRS?

[JotikaT2]

You will still need to enter the gross proceeds as reported on the 1099-S to ensure the amounts match what is reported on your tax return.

Any adjustments for sales expenses or cost adjustments would be made to the Cost or other basis section.

[mbureau747]

Thanks JotikaT2, I guess I did not say that the Filer, a Law firm representing the buyer, had entered a sum half the complete sales + expenses, etc, that I ended up entering separately made me wonder  what the consequences would be if the sent 1099-S by the filer and my calculations entered in Turbo tax, for the same property, being so different, would, possibly end up with a review with the IRS and having to go and have to explain the reason why the big difference.  

[JotikaT2]

Essentially, as long as the gross proceeds reported to the IRS match the amounts reported as gross proceeds on your tax return match, you should be fine. I would recommend retaining supporting documents for your calculations when computing your overall gain or loss on the sale and keeping it with your tax return records.

If the taxing agencies ever request support for the overall amounts reported on your tax return, you will be able to provide support for the amounts reported.

[reknutson]

Where do i enter the sale of an investment property

[Vanessa A]

To enter the sale of your investment property click the following:

• Federal
• Income
• Scroll down to Investment Income and click Show More
• Start next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)

[pk]

@reknutson , having read through the  above interaction, I beg to disagree ---- if the 1099-S for GROSS PROCEEDS is half of what it should be  --- you need to get  the issuer to send you a corrected 1099-S.   If the issuer refuses  and you still think it is wrong ( I don't understand how the gross proceeds  can be  off by that much --50% ? ), you are still required to report  the actual  amounts.  A wrongly reported  information return ( 1099-S) does not  provide a shade  for you -- you still have to truthful or it is criminal ( per the IRS ), absent an honest mistake.

Please can you explain the situation a bit more e.g. how are you computing the gross proceeds ?

[pk]

@mbureau747 having read through the  above interaction, I beg to disagree ---- if the 1099-S for GROSS PROCEEDS is half of what it should be  --- you need to get  the issuer to send you a corrected 1099-S.   If the issuer refuses  and you still think it is wrong ( I don't understand how the gross proceeds  can be  off by that much --50% ? ), you are still required to report  the actual  amounts.  A wrongly reported  information return ( 1099-S) does not  provide a shade  for you -- you still have to truthful or it is criminal ( per the IRS ), absent an honest mistake.

Please can you explain the situation a bit more e.g. how are you computing the gross proceeds ?