1099-S

[mperry3060]

Hello,

I need to enter my 1099-S for the sale of a  second home. The gross amount on the 1099-S is substantially higher than the amount I received as evidenced by the Escrow Closing Statement. Do I need to enter the 1099-S gross amount or can I alternatively enter the amount on the closing statement?

Thank you all much!

Marcus

[HelenC12]

You would enter the 1099-S gross amount but you'll be able to enter your cost basis. Your cost basis will include some of the amounts on your closing statement so you're only taxed on your gain. Don't forget to add home improvements, made in previous years, to your cost basis.

See Where do I enter the sale of a second home, an inherited home, or land on my 2020 taxes?

[mperry3060]

Thank you Helen for responding!

Here is a little more information to help you get a better idea of what my situation is:

Some years after my ex-wife bought a home, I gave her a sum of money to pay down her mortgage balance and she then refinanced her property. I took a minority equity interest in the property and was on title. She occupied it, I never did. I was not on her loan and I did not pay any homeownership costs like property taxes, HOA dues, etc., I just had a minority equity interest in the property of 29.69%.

My investment in her property was $102,200. My net proceeds at closing were $94,277.40. The Title Company sent me a 1099-S in the amount of $170,717.50 or 29.69% of the selling price of the home which was $575,000.

Any advice would be greatly appreciated. I would gladly compensate you for your time!

Sincerely,

Marcus

[fanfare]

the 1099-S amount is accurate, based on what you said..

After closing costs and your basis is subtracted, that's your taxable amount.

if your share was 171K, how did you end up with only 94K.?

that's probably your net after paying off mortgages.

[mperry3060]

Yes, the $171K was my share of the gross proceeds of the sale amount. The $94K was my net after mortgage payoff and closing costs. Then what I must do I guess is to take the loan payoff, closing costs, and any other expenses and use  29.69% of that amount (which was my ownership interest). Add that sum to my investment amount of $102,200, then subtract that total from the 1099-S gross proceeds to establish my gain or loss on the sale. 

Do you concur?

Thank you so very much,

Marcus

[SweetieJean]

The loan payoff does not factor into the gain calculation.