Question

How would the sale of a house I own affect my taxes in 2019 ?

Forum|Forum|6 years ago
July 23, 2019
1 reply
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I bought it for 175,000.00 but is only selling for 170,000.00. I also had to spend 15000.00 to fix what was broken.

TurboTax Self Employed Online

Employee

It depends on how the house was used. if this was for personal use (used as a first or second home by you or family members), the loss is not deductible. If you receive a form 1099-S, the sale will have to be reported on your tax return; but you will show zero (0) for a gain or loss. TurboTax can handle this.

If this was an investment , such as"house flipping", then the $20,000 loss (175K + 15K - 170K = 20K) is deductible. You report it as a capital loss, on form 8949 and Schedule D; unless you are in the business of house flipping, then you report it as a business loss, on Schedule C.

If it was the sale of a rental house, it is still a capital loss, but the "depreciation recapture" will reduce the amount of the loss.

A

archie-martinez6Author

The house was used as a first home by my daughter and grandchildren. They did not pay me any rentor taxes on the house. How does this affect how I report the money from the sale?

rjs

Employee

Using the house as a home for your daughter, who did not pay rent, is a personal use. You cannot deduct the loss on the sale. If you did not receive a Form 1099-S you do not have to report the sale at all.

If you did receive a Form 1099-S, you enter the sale in TurboTax as an investment sale. Start in the topic for "Stocks, Mutual Funds, Bonds, Other." When it asks you what type of investment you sold, select "Second Home." The sale will be reported on Form 8949 and Schedule D, with zero gain or loss. (These instructions for entering the sale are for 2018 TurboTax. TurboTax for 2019 is not available yet. I assume the procedure will be similar.)