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You should report this as an Installment Sale so that you recognize capital gains (and pay tax) only as you receive payment. TurboTax makes this calculation for you.
The easiest way to find this section of TurboTax is to use the Search box at the top right side of the TurboTax header. Click on the magnifying glass, type in "installment sales", and hit Enter. The first result should be "jump to installment sales". Click on this link to go directly to the input screen for this topic.
See the screenshot below for the box to check when you begin the interview. Follow the interview to enter the information about your sale from Form 1099-S, the payments you received this year, and to see the amount of capital gains that will be reported on this year's tax return.Do you still have to report the 1099-S or does the Q & A for the installment sales assume that?
I am selling house.
Getting downpayment and financing and buyer will make payments.
I will get 1099S or 1099INST ?
Who will produce that and send me. Do I need it?
1) you will get a 1099-S at closing ... look for it in the pile of papers you go home with
2) you need to have an amortization table to keep track of the payments showing the breakdown into principle and interest ... both parties will need to get one.
3) no 1099-INT is issued by anyone and you will not issue a 1098 for the mort int paid either. In the program you will report the principle and interest paid in the installment sale section ... the interest portion will be reported on the Sch B automatically. You will need the name, address and SS# of the buyer for the Sch B and they will need your name, address and SS# for their Sch A so make sure you exchange info at closing.
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