What are net proceeds from sale of second home

[msignaldo]

I have only closing disclosure with all the numbers including mortgage payoff.

[LindaA · Accepted solution]

The net proceeds would be the gross proceeds less any deductible expenses associated with the sale. Sales proceeds are usually reported on a Form 1099-S or on an escrow or settlement statement. 

Sales expenses are generally listed in the seller's column of your settlement statement and include:

• Commissions
• Appraisal fees
• Broker's fees
• Legal fees
• Advertising fees
• Home inspection reports
• Title insurance
• Transfer taxes or fees
• Geological surveys
• Loan charges (points) or other fees paid on the buyer's behalf

Note that sales expenses do not include:

• Mortgage payoffs
• Home equity loan payoffs
• Rent-back costs
• Payoff to creditors
• Property taxes
• Homeowner association (HOA) fees

[mikeandene]

Does the net proceeds take into account what you originally paid for the property? How do you show if you had a loss?

[Critter]

On the return you will enter the sales price on the form 1099-S  and the cost basis of the home (mortgage payoffs have NOTHING to do with a profit or loss).

Cost basis of the home includes : 

Original purchase price of the home + the closing costs  +

Closing costs for selling the home ( do NOT include mortgage payoffs)  +

Any improvements you made while you owned the home ( like roof replacements) -

Any casualty losses +

Any other costs not already mentioned.