Form 1099S Question

[whitfieldra]

I received a 1099-S for the sale of my townhouse ins Nevada, what am I supposed to do with it for tax purposes?

[Hal_Al]

It depends on what the townhouse was used for.

The capital gain on the sale of your primary home is not taxable (up to $250K, $500K married). To be eligible you must have lived in and owned the home for at least 2 out of the 5 year prior to sale. You do not even need to report it on your tax return, unless you got a tax document, usually a 1099-S. The 1099-S may have been included in your closing documents, instead of arriving in the mail, in Jan. or Feb. of the following year.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

All Income  Show More

Scroll down to:

-Less Common Income

     - Sale of Home

[Macy522]

The part where you said "Most people put in 0 for cost basis", I thought Cost basis was the amount you originally paid for the house/land/ whatever you are reporting you then sold. So how could anyone put 0 there?

Can you please explain what they are really asking for when they mention "cost basis" so I know what they are referring to, and IF I need to put 0 there or not as well? I am clearly confused.

[Hal_Al]

@Macy522  - Yes, 0 would be wrong for the sale of most (almost all) capital assets.  But @DianeC958  was responding to a question about Timber Sales, specifically .  Cost basis for timber is usually zero. Timber basis is not the cost of the property. For a discussion on Timber Basis, see https://www.extension.purdue.edu/extmedia/FNR/FNR_FAQ_2.pdf

[Macy522]

I came to this question because it was about cost basis, sorry I am talking about sale of home and land in my situation. Can you please explain what cost basis means, what are they asking for in My situation?

[Hal_Al]

Cost basis is, indeed, what you originally paid for it plus the cost of any improvements (e.g. new roof) over the years.  For some people, cost basis might involve some idiosyncrasies, e.g. inherited or gift property  or previously deceased spouse. 

[RRRichard]

In my case i received money for an easement for a pipeline across my property. As I was not actually selling the land and I still have use of the surface but somewhat restricted. I didn’t feel I needed a value in anything pertaining to the actual selling of the land that would generate a capital gain. Also, it was a one time payment not like a lease. For instance I could not build a permanent structure in the easement corridor. In my case there was already a pipeline there they were replacing the old one. The result of that was they were actually putting the new line in a more friendly place for me. If in the future I want to add to the house I could, but to limited extent, but not violate the agreement. 

[Hal_Al]

@RRRichard 

See https://ttlc.intuit.com/community/taxes/discussion/you-don-t-usually-report-payment-for-an-easement-...

[ridmy05]

how do i enter it on taxes sold house this form was giving from title company.  Thank you Rick Clark

[Hal_Al]

It depends on what the "house" used for.  TurboTax does not provide a specific entry place for a 1099-S.  If it was your primary home. follow instructions for 1.  If anything else, including a 2nd home. follow instructions for 2.

1. The capital gain on the sale of your primary home is not taxable (up to $250K, $500K married). To be eligible you must have lived in and owned the home for at least 2 out of the 5 year prior to sale. You do not even need to report it on your tax return, unless you got a tax document, usually a 1099-S. The 1099-S may have been included in your closing documents, instead of arriving in the mail, in Jan. or Feb. of the following year.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

-Less Common Income

     - Sale of Home

2.  In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - 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. 

[capickett71]

How did you report the 1099-s then on your taxes?

I have a similar situation where the utility company replaced old poles and updated the electric lines on my property and then updated the dates on the utility easement . they sent me a 1099-s. I  don't know how to report since I didn't sell my home to them

[Hal_Al]

You don't usually report payment for an easement or damages.  You  only reduce your cost basis in the remaining property, by the amount you received, for when the property is sold in the future. But, if you got the 1099-S, it must be reported on your tax return, but it is most likely not taxable.

Report the 1099-S amount as sale proceeds, then show the same amount  as your basis, for a net gain of $0. On your own records, reduce your cost basis by that amount, for future sale. 

TurboTax does not have an entry point for a 1099-S (other than home sale). So,  In TurboTax (TT), enter at:
- Federal Taxes tab
 - Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Investment Income
   -Stocks, mutual funds, Bonds, Other (Real estate is other)

[RRRichard]

First of all do you own the land your house is on? Is there already an easement in place? And did they pay you for replacing the utility pole? It may have been payment for land damages if there is already an easement.  A payment for easements is not really a sale of the land but it is more like a loss of use for the portion of the land the easement covers. And example you could not build a permanent structure there. But if there is already an easement and they wrote you check it could have been for land damages while resetting the pole. In that case I'd say the amount they paid you is for the restoration work you may have to do the restore the property back to what it was. I'd just use that same value as the cost value of the property so it comes out to zero. The taxing authorities did a very poor job dealing with payments for easements as you say you didn't sell the property to the utility. 

[capickett71]

Yes ,I do own the land my house is on and yes there was already an easement in place since the 1940's!  from what they said the money was for digging  all new holes,  replacing the old poles as well as adding in additional poles where they was not before. they gave me an amount that was per each hole dug and the total was $1.400.00. it was a mess when they left too. Okay I can see that that could of been for land damages and restoration work for us.

when you said use that same value as the cost value of the property so it comes to zero, Where do I put this down on the 1040 form or schedule exactly? 

[Steveford]

received 1099-s for timber sales.  Where do I report it?