Sale of Second Some - Real Estate Commissions

[MichTax2019]

I received 1099-S at closing.  It lists Gross Proceeds from sale of 2nd home.  I have not lived in the home for 24 months of the past 5 years so must pay capital gains. 

Turbo Tax asks for Net Proceeds for sale of Second Home. 

- Do I list $300,000, which is gross proceeds listed on 1099-S, or do I remove real estate fees of $18,000 and list net proceed of $282,000?  

- Or should I list the $18,000 real estate fees as Sales expense?

Can I also deduct Title closing fee, Title Insurance and payoff wire fee?

Your guidance is appreciated.

[LeonardS]

Your net proceeds from the sale of your second home is the sale price less expenses of the sale.  This link to the TurboTax help page Tax Aspects of Home Ownership: Selling a Home has detailed information on the selling of your home that you may find useful.

[NCperson]

yes, all that is subtracted from the sales price. 

[MichTax2019]

The information was very helpful.  Are you able to pro-rate the gain?  We were in the home for 19 months of the last 5 years.  Therefore, we don't make the 24 month threshold.  Is the 2 year requirement a firm requirement or is there a way to pro-rate the fact it was the primary residence for 19 months of the past five years?

Please advise.  Thanks.

[NCperson]

there could be a way to pro-rate, but it depends on what the circumstances were that caused you to move.....

why did you move?

[AmyC]

Yes, the program can pro-rate if you meet the exceptions. Please review this IRS link on main home sale and exceptions.

[belfast67]

I sold a second vacation home may I deduct capital improvements from capital gains.  for instance anew roof, a porch, a septic system and bathroom.

[RobertG]

Yes, you may deduct capital improvements on the sale of a second home.

Improvements become part of your basis, and decrease the amount of your gain.

You can list them separately or include them in your basis.

@belfast67

[csc3]

I just reported my second home sale and noticed the sale amount entered showed up in form 8948, Part II, Column (d) Proceeds.

Because I did receive a 1099-S, and the form 8949 instructions for this column states "If you receive a Form 1099-B or 1099-S for a transaction enter in column (d), the proceeds shown on the form." With this, I was NOT able to reduce my expenses, including commission, from the sale proceeds. 

 What should I do to offset my sale proceeds, reported in 1099-S, with my selling expenses?

[Critter-3 · Accepted solution]

It is just this simple ... the amount on the 1099-S is the sales price and MUST be reported on the Sch D as is ... failure to do so will get you an audit notice in a couple of years.   The cost basis of the home is the total of the original purchase price + cost to buy + improvements + cost to sell.  Sales price -  cost basis =  capital gain on which you will pay income taxes.  

[pk]

@csc3 , while agreeing with my colleagues @Critter-3 , @RobertG ,  my strong suggestion is that  ( assuming  you still need help on this ) to read through the instructions for the form 8949, especially the codes  and the worksheets.  If  ,and thereafter,  you still need help, please feel welcome to post the issues here and one of us definitely help you ASAP.

pk