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cgilenstine
New Member

Where do i report real estate agent fees for the sale of investment property

 
1 Reply
DS30
New Member

Where do i report real estate agent fees for the sale of investment property

It depends.

You are allowed to deduct from the sales price almost any type of selling expenses, provided that they don’t physically affect the property. Such expenses may include:

  • advertising
  • appraisal fees
  • attorney fees
  • closing fees
  • document preparation fees
  • escrow fees
  • mortgage satisfaction fees
  • notary fees
  • points paid by seller to obtain financing for buyer
  • real estate broker's commission or agent fees
  • recording fees (if paid by the seller)
  • costs of removing title clouds
  • settlement fees
  • title search fees, and
  • transfer or stamp taxes charged by city, county, or state governments

If you are entering the sale under investments, you will just decrease the net sales price by the amount of the selling fees (step 9 below).

To enter this as a capital asset sale in TurboTax, log into your tax return  (for TurboTax Online sign-in, click Here) and type "investment income (gains and losses)" in the search bar then select "jump to investment income (gains and losses)". TurboTax will guide you in entering this information (see step 6 below) 

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

  1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
  3. Next click on “I’ll choose what I work on” (Jump to full list)
  4. Scroll down the screen until to come to the section “Investment Income”
  5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
  6. The first screen will ask if you sold any investments during the current tax year (This includes any asset held as an investment property so answer “yes” to this question)
  7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
  8. Choose type of investment you sold - select everything else
  9. Some basic information:
    1. Description –  Usually the address of the property sold
    2. Sales Proceeds – Your net proceeds from the sale (usually reported on 1099-S)
    3. Date Sold – Date you sold the property (on 1099-S)
  10. Tell us how you acquired the property - purchased
  11. Enter the your cost basis- cost plus capital improvements less any depreciation deducted or allowable as a deduction less any casualty losses take on the property.
  12. Date acquired  (Just remember that the date acquired should be more than a year before the date sold in order for the sale to get long term capital gains treatment and the lower capital gains rate)
  13. If you had a loss, on the question of "Did you use this property for business or investment?" If the property was not used for any personal use, you will answer that this was for investment. Otherwise, you will not be able to deduct the capital loss of a personal use capital asset.

Click these links for further information about reporting the sale of a capital asset or Capital Gains and Losses

If you are entering the sale under sale of business assets, you will just increase the cost basis by the amount of the selling fees (step 8 below).

If you are not able to report this sale under the investment section, you will be able to report it as the sale of a business asset.

To this investment property as the sale of a business property in TurboTax Online or Desktop, please follow these steps:

  1. Once you are in your tax return, click on the “Business" tab ("Federal Taxes" tab in Premier)
  2. Next click on “Business Income and Expense" ("Wages and Income" tab in Premier)
  3. Next click on “I’ll choose what I work on” (Jump to full list)
  4. Scroll down the screen until to come to the section “Less Common Business Situations” ("Business Items" in Premier)
  5. Choose “Sale of Business Property” and select “start’
  6. Select "Sale of business or rental property that you haven't already reported"
  7. Sale of Business or Rental Property - yes
  8. Enter all the information about your Investment Property Sale here
    1. Description - address of property
    2. Date acquired - original acquisition date
    3. Date sold - date of sale (should be on 1099-S)
    4. Total sales price - total sales price (should be reported on 1099-S)
    5. Cost of property (or tax basis) plus expenses of sales - original cost plus any capital improvements plus expenses of sales
    6. Depreciation taken on this property - total depreciation taken property when rental (Please note the IRS will assume that you have taken the correct depreciation on your rental property while your property was available for rent regardless of whether you have actually take it or not)
  9. What type of property is this? - select appropriate answer related to your investment property here.
  10. Installment sales - no if not on installment sale
  11. 2 screens that show the summary of what you have entered for your property sale
  12. Sale of Other Business Property - Choose yes if any of these situation apply, otherwise choose no.
    1. You sold property that cannot be depreciated such as vacant land, mineral rights or inventory
    2. You sold business or rental property that you owed for one year or less
    3. You sold business or rental property at a loss.
  13. Total Gross Proceeds - enter your 1099-S sales information here (this could be the same amount that was reported earlier as sales price)

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