I received a form 1099-S, but gain from home sale was less than $100,000, do I still report this?

[als2020]

Hello,

I sold my home in MA last year, and I just received a form 1099-S from the closing attorney (my attorney), but because the gain was not even $100,000, which means I do not have to report the sale or pay capital gain tax, however, do I still need to enter the 1099-S on my TurboTax?

[DoninGA · Accepted solution]

Yes, you do have to report the sale since a Form 1099-S was received.  No taxes will be owed but it does have to be reported on a tax return.

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premier or Self-Employed edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return. 

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Sale of Home (gain or loss), click the start or update button

Or enter sale of home in the Search box located in the upper right of the program screen. Click on Jump to sale of home

[als2020]

Thanks! Is it appropriate to put the total closing costs as "Seller Expenses"? Would it matter given it's still less than $250,000 profit? 

[JotikaT2]

Yes, you can put the closing costs as selling expenses. 

If you do not have any reportable gains, there will be nothing that is reportable on your tax return as long as you meet the exclusions.

Sale of a home exclusion

[DoninGA]

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@als2020 wrote:

Thanks! Is it appropriate to put the total closing costs as "Seller Expenses"? Would it matter given it's still less than $250,000 profit? 

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If the gain on the sale was much less than the exclusion, it probably would not matter.   But this is how it should be reported -

Closing costs you paid are added to the basis of the home -

Abstract fees (abstract of title fees),
• Charges for installing utility services,
• Legal fees (including fees for the title search and preparing the sales contract and deed),
• Recording fees,
• Survey fees,
• Transfer or stamp taxes, and
• Owner's title insurance.

Selling expenses include -

a. Any sales commissions (for example, a real estate agent's sales commission)
b. Any advertising fees
c. Any legal fees
d. Any mortgage points or other loan charges you paid that would normally have been the buyer's
responsibility
e. Any other fees or costs to sell your home