Is it unusual not receive a 1099 S form for the sale of your home? Is is typically sent by closing attorney? Should we request one.

[DM06]

Hi 

How about if the capital gains from my primary residence for 9 years was over $250,000

and I am single and no 1099 was issued. Should I report it on my return?

If so, just so I have an idea of how much I will need to pay in 2022.  What percentage should I use to calculate if I live in California?

[Hal_Al]

Q. How about if the capital gains from my primary residence for 9 years was over $250,000

and I am single and no 1099 was issued. Should I report it on my return?

A. Yes. TurboTax can handle the home sale exclusion ($250K) part.

The 1099-S is usually included in the closing papers and is not sent to you in January of the following year, like most tax documents. 

For an estimate, try this tool https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1. Enter your regular income first to see the regular tax. Then add the sale to see the effect.
Enter the gain over $250K as a long term capital gain (LTCG).  Depending on how much total income you have LTCG are partially taxed at 0%, 15%, 20% and/or 23.8%.   

California also excludes the first $250K of gain. CA taxes capital gains as regular income. It does not recognize the distinction between short-term and long-term capital gains. This means your capital gains taxes will run between 1% up to 13.3%, depending on your overall income and corresponding California tax bracket.

[homefry1]

Another Question:

Mother in Law sold her house in 2019 at 100 years old.  No income other than SS benefits-less than taxable amount.  Capital gains less than 250K.  In the closing, there's a piece of paper saying it is an alternative form 1099S.  (Date/Proceeds/Address). We did not receive an IRS form that looks like what is shown on the IRS website.

We did not file a 2019 return for her.  Can we (more importantly, should we) do that retroactively?

[Hal_Al]

The  piece of paper saying it is an alternative form 1099S is effectively the 1099-S.  It's almost certain that the IRS was sent a copy by the closing agent. 

Q. We did not file a 2019 return for her.  Can we  do that retroactively?

A.  Yes.  It is not too late to file a 2019 tax return.

Q. More importantly, should we file a 2019 tax return? 

A.  No.  If you get an IRS notice, it's easily explained.  The fact that she has no other reportable income means she is unlikely to get an IRS notice.  A 1099-S issued to a Social security recipient  will, most likely, be presumed to be a home sale, by the IRS. 

[homefry1]

Thank you for the quick reply. Takes a lot of stress off us! 

[brucelbryant]

Hello

I have a couple questions please. In June of 2021, as the executor of my Mother's Estate, I sold her house. I have not received a 1099S. My brother and I received equal amounts of thee proceeds from the sale.  I am assuming I still need to report the sale (stepped Up basis so no tax)? Do my brother and I both report the sale as inherited? Or can I just report the total sale? Which forms will I need to use (maybe Turbo Tax figures that out)?

Thanks Bruce Bryant

[DMarkM1]

It depends on what has been reported on the Form 1099S.  Normally, the 1099S is part of the closing package.

If not you should request a copy(s) from the title company/closing agent. 

The 1099S may show all the proceeds to one of you or may show the proceeds divided.  If all the proceeds are on one 1099S reported to one social security number then that is who files the sale on their tax return.  If the proceeds were divided on the Forms 1099S then you each report your share.

If the 1099S shows to proceeds to the estate EIN, then the estate reports the sale on the annual form 1041 filed by the executor.      

[Anonymous]

Hello,

I'm curious if you found a resolution to your situation. I have the same circumstances, more or less, but most notably no 1099. I'm about to contact the title company and/or closing agent. I know I definitely need to report it and pay capital gains so I don't know why one was not provided. Did you get a hold of one or was it ultimately not an issue? Thank you.

[LeonardS]

No, it is not unusual if you do not receive a Form 1099-S on the sale of your home.  Generally, if you indicated to the company closing the sale that you are selling your main home and the sale price is below the capital gains maximum exclusion a Form 1099-S will not be issued.   You may exclude up to $250,000 of that gain from your income as a single filer, or up to $500,000 of that gain if you file a joint return with your spouse.

You should verify with the title company/closing agent the reason why you have not received a Form 1099-S.

[Anonymous]

I went through the closing documents again more carefully and this time I noticed that on just one of the pages it is stated: Substitute Form 1099-S. I was expecting a format similar to other 1099 forms so I overlooked it. Hope this might help someone else, thanks.

[cgillespie14]

Hello! 

Does this mean if the revenue from the home was less than 250,000 it does not need to be reported? 

[FangxiaL]

No, it is not unusual not receiving a 1099-S form.

If you received a Form 1099-S, you need to report it on your tax return.

You don't have to report the home sale if:

• You did not receive a Form 1099-S
• You sold your primary residence
• The sale qualifies for the capital gain exclusion up to $250k/$500k (met the ownership test and use test)
• The gain is less the $250k/$500k.

[tccpg288]

What if there was a period where the property was rented for business use in a 1065? The owner did indeed live in it for 2 of the 5 previous years.

[Critter-3]

• Whoever's in charge of the closing is responsible for asking the correct questions to determine if a 1099-s needs to be issued. When they asked if you had ever use the home for business purposes and you said yes  then a 1099s would have been  issued automatically at the closing and the sale of the home must be reported.

[Hal_Al]

Q. What if there was a period where the property was rented out, but the owner did indeed live in it for 2 of the 5  years prior to sale?

A. The owner qualifies for the home sale exclusion, but must recapture (pay tax on) the depreciation claimed (or should have been claimed) while it was rented.

If the period of rental occurred prior to the owmer occuping the home as their principal residence, a prorated portion of the capital gain is also taxable. 

Q. What if there was a period where the property was rented for business use in a 1065? The owner did indeed live in it for 2 of the 5 previous years.

A. It depends on more info. "Business use"? 1065? "When were the "5 previous years"