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RU2
Level 7

1099s Bug on Form 4797 Line 1 for Rental Property Sale

Was just about to submit my return due tomorrow and noticed a bug on Form 4797. I sold my first property in 2018. It was a rental throughout. In Turbotax you report this on the rentals section under the property part. However, when I came to check form 4797, this was all filled in apparently correctly except that Line 1 (1099s reporting) was left blank - probably the most important box! I realize this is because Turbotax does not ask if the rental property sale was reported to you on form 1099s when going through the sales breakdown in the rental section.

 

Line 1 of 4797 states "Enter the gross proceeds from sales or exchanges reported to you for 2018 on Form(s) 1099-B or 1099-S (orsubstitute statement) that you are including on line 2, 10, or 20. See instructions . . . . . . . "

 

Two questions:

1. I am correct in saying Line 1 of 4797 should have the value stated in the 1099s of the property sold, correct?

 

2. As the rest of the form has been correctly been filled in by Turbotax, it sounds like I am right in saying Turbotax have missed a key question from the sale of rental property section - do you agree? i.e. it should have asked, "Was any of this sale reported to you on a 1099s"? It doesn't impact the tax due but if that box is left blank, it will probably cause issues as it won't match what the IRS has reported to it.

3 Replies
Level 14

1099s Bug on Form 4797 Line 1 for Rental Property Sale

Question asked correctly, you apparently answered incorrectly. TurboTax asks for gross proceeds; Source is irrelevant.

RU2
Level 7

1099s Bug on Form 4797 Line 1 for Rental Property Sale

Hi, on the rental property sale section, TurboTax doesn’t ask for total gross proceeds to correctly fill in line 1 of 4797. It only asks the gross proceeds in “sale of business property” section which you don’t use if you’ve already reported the sale of the rental property in the rental property section. In the rental property section, the gross proceeds is split across all the improvements made to the property so nowhere does it tally the total gross proceeds and then reports that on line 1 of 4797. This seems incorrect.

 

 

RU2
Level 7

1099s Bug on Form 4797 Line 1 for Rental Property Sale

Spoke to TurboTax and they agreed it’s an error. 

If you are reporting property sold in the rental property section, TurboTax does not fill in box (line) 1 of form 4797 automatically so you need to manually find the form and fill that box in so it matches the 1099s.