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dennynells
New Member

I sold my home at a $14,000 loss but received a 1099S on the for the gross proceeds. Do I have to pay tax on the gross proceeds?

 
4 Replies
DeniseF1
New Member

I sold my home at a $14,000 loss but received a 1099S on the for the gross proceeds. Do I have to pay tax on the gross proceeds?

A 1099-S is used for an investment sale.  TurboTax will calculate tax penalty if applicable.  

Sales of real estate are usually reportable on your tax return, especially if a form 1099-S is issued. There will most likely be no capital gain and therefore no tax. Any capital gain would be on the difference between what the house was worth on the date of the decedent's death (your "cost basis") and what the house sold for.  If you made any improvements, those costs would be added to your cost basis in determining the capital gain. Add your closing cost to the cost basis. Report only your share of the sale and basis and capital gain or loss. Whether you have a deductible capital loss is dependent on the answers to the details.

If you lived in the house, you cannot take a deduction for a loss on the sale of a residence, even a second home.

If the house was "investment property", and sat vacant all this time, you can deduct the loss.

If it was rented out, you can still deduct the loss (it's rental investment property), but you must "recapture" the depreciation allowed or allowable. That is, you must report the depreciation taken (or that you should have taken), over the years, as income on your tax return in the year you sold it. It essentially reduces your capital loss, but the capital loss and recapture are reported in different places on the tax return.

In TurboTax (TT), enter at:
- Federal Taxes tab 

 - Wages & Income

Scroll down to:

-Investment Income

   -Stocks, mutual funds, Bonds, Other (Real estate is other)

Answer no, when asked if you got a 1099-B. then follow the interview. When asked if used for business or rental, check "other investment purpose"

BobinCT
Level 7

I sold my home at a $14,000 loss but received a 1099S on the for the gross proceeds. Do I have to pay tax on the gross proceeds?

To reinforce what DeniseF1 said: since you got a 1099-S it's important that you report the sale (for the gross amount on the form) even though it doesn't result in a taxable profit or a tax deductible loss.  Until you report it, the IRS will consider it ALL profit.
amhansel1
New Member

I sold my home at a $14,000 loss but received a 1099S on the for the gross proceeds. Do I have to pay tax on the gross proceeds?

Sold my home in New Mexico and received the gross amount of the transaction. What firm do I need to the net amount which would be the purchase price and any repairs to show the actual gain?

 

DoninGA
Level 15

I sold my home at a $14,000 loss but received a 1099S on the for the gross proceeds. Do I have to pay tax on the gross proceeds?


@amhansel1 wrote:

Sold my home in New Mexico and received the gross amount of the transaction. What firm do I need to the net amount which would be the purchase price and any repairs to show the actual gain?

 


To determine the gain or loss on the sale of a personal residence, never used as a rental or in a business, you can use Worksheet 2 in the IRS Publication 532, Selling Your Home starting on page 11 - https://www.irs.gov/pub/irs-pdf/p523.pdf#page=11

 

Simply the gain or loss is the Sales Price minus Sales Expenses minus the Adjusted Basis of the Home (Purchase price plus the cost of Improvements prior to the sale)

 

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported.

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