1099-s

[pk]

@tanlongpham , I am confused .   You said earlier that this was a rental property that you sold.  In such a case there is no US$250,000 exclusion  -- that is for your principal residence that you have owned for at least two years  and have used as your main residence  for 24 months  within the last five years from the date of sale consummation.

Is there more one of us can do for you ?

[tanlongpham]

Thank you PK. It's a rental so I can't claim $250K. I bought the property in 2006 and placed it for rental in 2008 until 2022 when it was sold.

[tanlongpham]

Hi John on the tap of home sale, it's for primary resident. the house I sold was a rental for 14 years of the 17 years ownership. It was bought in 2005 and was rented out in 2008.

[tanlongpham]

"employee tax expert" is that mean you are an agent of turbotax?

[tanlongpham]

Hi everyone again that have helping me on my 1099-s.

I was on live call with Turbotax expert last night but could not solve my concern.

I live in Fl has rental house in AZ that was sold in 2022. The house was rented for Jan and Feb of 2022 but no rental fees were collected. The tenant vacated the property with significant damages to the home.

I received subtitute 1099-s with only Box 2 in the amount it was sold.

In turbotax under Rental and Royalty I have $0 in the Rental Income tab.

In the Sale of Property/Depreciation under Your Property Assets Describe This Asset: I click on Rental Real Estate Property then Residential Rental Real Estate under Categorized this asset. The next window I  input the cost of the house, cost of land and date of purchase (11/10/2005). At the next window I clicked on The item was sold and put in the sold date (08/11/2022) and the date of first started using it for business 04/1082008). The next window show amount of depreciation of 96103. The window Special handling required ask to select Yes if conditions describe my situation.

"this asset was a rental, a home office, or a home office improvement"  so I click yes. The next window is back to Review of rental summery. It never ask for my 1099-s

how come? THank you

[PattiF]

There is no section to enter a 1099-S exactly except for the sale of a personal home. That sale is often reported on a 1099-S. The information on the 1099-S is entered in the section of the tax return that is reported on the 1099-S.

From the IRS:

Generally, you are required to report a transaction that consists in whole or in part of the sale or exchange for money, indebtedness, property, or services of any present or future ownership interest in any of the following.

• Improved or unimproved land, including air space.
• Inherently permanent structures, including any residential, commercial, or industrial building.
• A condominium unit and its appurtenant fixtures and common elements, including land.
• Stock in a cooperative housing corporation (as defined in section 216).
• Any non-contingent interest in standing timber.

The form reports various sales and no tax software has an exact entry spot for form 1099-S like you would enter a 1099-INT or a 1099-R. 

@tanlongpham 

[tanlongpham]

Thank you for clarification. So under  Sale of Business Property, I click on Sales of business or rental property. On the next screen " Do all of the following apply to the property you sold?" I click NO because only 2 out of the 3 criteria apply:

* you owned the property more than one year YES

*you sold it for a profit YES

* It is one of these property types:

      -property you took a depreciation deduction for NO

      -certain farm land NO

     -oil, gas ... NO

Did I do that correctly by clicking NO since not all of the criteria apply to me?

on the next screen Do any of the following description apply to the items you sold? I click NO because I owned the property more than one year, and did not sold it at a loss. Then next screen has Total Gross Proceeds on form 1099-b and 1099-s I entered what is recorded in box 2 of my substitute 1099-s.

[AbrahamT]

Yes, you answered the information correctly.

[pk]

@tanlongpham , sorry for the delayed response.   However, would like to point out this :

(a) You said this was a rental property , specifically residential property.

(b) If that is case , you must depreciate the property based on MACRS convention and a class life of 27.5 years.

(c) Therefore whether during the useful life years , whether you reported / recognized the yearly depreciation or not  ( on Schedule-E ), since it was allowable , you are deemed to have taken it.

So the answer here is  "I have taken depreciation on this property "

Note , as I said earlier , this accumulated depreciation reduces your basis  and hence increases your gain and to the extent  that the gain is due to depreciation, it is treated as ordinary gain and NOT Capital gain.

Does this make sense  and is there more one of us can do for you ?  I recognize that the filing date is here and so if you have already filed  then you need to consider  filing an amended return, once  your return has been processed.

pk

[tanlongpham]

Hi PK,

yes it makes sense from the tax code, but to a normal person, it makes no sense because I have to lie to answer YES to that question.

I will vote for anyone who is pushing a straight flat tax across the board: no more loop holes no more deductions ...