Where/how to enter 1099-S for the sale of a rental unit in 2023?

[angel888]

I sold my rental property in 2023, and received 1099-S from the buyer's attorney office.  Neither answers from TurboTax here now is able to help me on doing it.  

1.) If I go to rental, it only adjusts the appreciation from full year to partial year, but no where for me to enter 1099-S

2.) If I go to Less Common Income, it is for the sale of the "main" home, not for the rental property.

May I ask, where can I report the 1099-S, as well as all the expenses I paid for the sale (including fixing up bathroom and painting for the sale, all the closing fees, ...)? 

I am using Home & Business edition, so not sure if this version is able to support me doing what needs to be done.  Many thanks!

[PaulaM]

You don't need to enter the 1099-S form and the IRS will only be concerned that the data from the form is accounted for on your return. Enter the sale under the Rental section and indicate that you sold the property in the Property Profile section. 

Then move on to the Asset/Depreciation area where you will enter the details of the sale and recapture depreciation and calculate any remaining depreciation for the property. All assets in this section need to be disposed of.

Note: If you don't indicate in the Property detail section that the property is sold, you can still do so in the Asset/Depreciation section.

[angel888]

Hi Paula,

So many thanks for explaining this to me -- so much apprecaited!!  No wonder I couldn't connect 1099-S to the rental property sale because it is not needed to be entered.  But then how IRS would know if I make money or loss from this sale?

While I put down the sale date in 2023, the depreciation is prorated.  One item I am still not able to understand, may I ask what does it mean "Prior AMT depreciation"?  It automatically gives me a fixed number that seems to be the total depreciation over the years?

I did not do the depreciation at the beginning years (I did not know that I need to do so), then I did amendments in 2022 for 2018, 2019, and 2020 to add depreciation; however, I only received 1 letter from IRS in Dec 2022 that they had received it, then never heard from them any more (it's been 2 years now).  i.e., can I deduct those 3 years from the total depreciation over the years?  Is that what "Prior AMT" mean?  

So many thanks!

[PaulaM]

The IRS will know to look for the recording of the sale because they receive a copy of a 1099-S. Not all property sales produce a 1099-S form, but when it does the IRS has that record.

Prior AMT depreciation is the amount of depreciation for special depreciation allowance or an accelerated depreciation. If you did not do that, then the AMT depreciation will be the same as the accumulated depreciation number. The accumulated depreciation is the amount of depreciation that should have been taken even if you did not take it. That amount is 'recaptured' and you pay taxes on it.

You can only amend taxes for one year of missed depreciation. If more than that see this FAQ for your options and this post from AmyC on how to accomplish.

You might consider filing an extension while you get it all sorted out, but you'll have to do your best estimates of what you might owe in taxes and pay by 4/15 even if extending to file.

[angel888]

Hi Paula,

Thank you so much for your speedy helps here!!

Yes, I filed the extension.  I probably will do 2020 amendment today to file it before the deadline, and do the 2nd amendment once I understand better about how to do 3115. 

For the sale of the rental property in 2023, may I ask another question?  When I think I completed/entered all the numbers under BUSINESS Sale of Property/Depreciation , the RESULTS told me that I have gained ~35% more than the net gain based on the closing document (sale price minus all the cost/expenses), why?  And the weird thing is, even though so, the Fed refund remains the same amount (i.e., not decreased because of the higher income gain).  Is there anything I missed?