Tax Questions

[Buckeye78]

Hello,

1. What forms do I need to file for Federal Taxes if I received a 1099-S (sale of personal residence).

2. I owned the home for less than 2 years, do I need to be worried about a Capital Gains tax?

3. The 1099-S does not show costs for the adjusted basis/profit

4. How would I submit the documentation for items that can be deducted to arrive at the adjusted basis? 

[LindaS5247]

You can enter your Form 1099-S in TurboTax and follow the prompts to enter your sale of home.

To do this, you will:

1. Continue your return.
2. To get to the section of TurboTax for "Sale of Home" you will:

• If you are using TurboTax Online/Mobile: Go to sale of home.
• If you are using TurboTax Desktop: You can search for "sale of home", and select the Jump to link, "Jump to sale of home"

1. Answer "Yes" to the question "Did you sell or have your home foreclosed in 2024?"
2. Select "Continue"
3. Enter the address of the home you sold on the next screen, and select "Continue".
4. On the next screen, answer "Yes" to the question "Did you receive a Form 1099-S that reported this sale?" and enter the information from your 1099-S.
5. Follow the onscreen instructions and answer all follow-up questions.

• If you owned and lived in the place for two of the five years before the sale, then up to $250,000 of profit is tax-free.
• If you are married and file a joint return, the tax-free amount doubles to $500,000.

You must have used the home you are selling as your principal residence for at least two of the five years prior to the date of sale.

TurboTax will ask you questions about the sale of your home to properly report the transaction on your taxes.

You will not have to submit documentation for the sale of your home.  You will enter your information from your Form 1099-S.

TurboTax will help you determine if you have a capital gain and your adjusted basis of your home.

 In general, your adjusted basis is your cost in acquiring your home plus the cost of any capital improvements you have made, less casualty loss amounts you may have incurred.

Click here for "Where Do I Enter Form 1099-S?"

Click here for "Tax Aspects of Home Ownership: Selling a Home.

[DawnC]

You don't need any special forms.  Since you did not live in the home for 2 out of the last 5 years, you won't be able to exclude the gain.   You can enter your adjusted basis that you have kept track of.   You don't need to submit any documentation with your return, the IRS will ask later if they need it.  

The sale of a home is a capital gain transaction, so you will need TurboTax Premium if using TurboTax Online.   If you are using the desktop software, you can use any version - they all support investment sales.  

Where do I enter Form 1099-S?

How does selling a home affect my taxes?

The calculation for a capital gain or loss is straightforward: it starts with the selling price of your capital asset minus its cost basis (what you originally paid for it).

If the number is positive (in other words, you made money on the sale), that's your capital gain.

On the other hand, if the number is negative (you lost money), you have a capital loss, unless the item is personal-use property, which can never be deducted as a capital loss.   

[Buckeye78]

Thank you Dawn,

Property bought at $397K and sold for $425K.  However $26K went to the realtor, so is my capital gain $2K or $28K?  

[Buckeye78]

and another new question please:

I thought I had read on one of the tax forms for this year something about "if I have ever had debt forgiveness because of claiming insolvency."

I did a short sale back in 2008 during the Obama Era and the Mortgage crisis back then.  I was forgiven my debt for tax purposes by law due to the Obama law in 2008.  Would I still need to disclose this information on my 2024 return? 

[BillM223]

The capital gain is $2k. 

Realtor fees are subtracted from the sales price when calculating the gain, so (($425k-$26k) - $397k) assuming you don't have an adjusted basis.

P.S., capital gains taxes are not anything to be afraid of - capital gains are taxed at a lower rate then ordinary income.

[DawnC]

No, you don't need any information from 2008 reported on your 2024 tax return.