1099 - S Reverse Mortgage Transfer Transaction

[joesmithdroid]

Hello,

I would like to know whether a 1099 - S is an appropriate form to be filed?  This is my principal residence, and I have not sold the property, however I received a 1099 - S for $520,000 proceeds.  There is a note that mentions "transfer" so I am concerned that I should not file the 1099 - S.  

Oddly, I received a 1098 for interest on the same property.  Something just does not seem right.  

I would appreciate any help to guide me.

Have a superfantastic day,

[JamesG1]

The heading mentions '1099-S Reverse Mortgage Transfer Transaction'.  Is a reverse mortgage the source of the $520,000 proceeds?  

This IRS website states that reverse mortgage payments are considered loan proceeds and not income.

In addition, the interest from the transaction is not deductible until you actually pay the interest (usually when you pay off the loan in full).

You may choose to simply retain the documents with your tax records should a tax authority contact you at a later time about these transactions.

You may also choose to report the proceeds on IRS form 8949 / Schedule D Capital Gains and Losses with the same amount as Cost or other basis reporting $0 income.

In TurboTax Online, follow these steps to enter an investment transaction on an IRS form 1099-S.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages and Income.
• Scroll down to Investments and Savings.  Click Show more to the right. 
• Click Start/Revisit to the right of Stocks, mutual funds, bonds, other.
• At the screen Your investments and savings, click Add investments.
• At the screen Let's import your tax info, click Enter a different way.
• Click on Other, land, second homes, personal items, 1099-S.  Click Continue.

@joesmithdroid