Question

Sale of main home and received a 1099-S

Forum|Forum|3 years ago
March 7, 2023
2 replies
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I meet all the requirements to get the $500,000 exclusion from taxes for the sale of main house. The house sold for more than $500,000 but we lived in the house for over 40 years had after adjusting the cost basis for home improvements, etc., the gain on the house is under $500.000. Do I need to report the sale on my taxes since I got a 1099-S or is it not reportable since there is no taxable amount?

DoninGA

Employee

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

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PapabairAuthor

I've been told but cannot confirm that one can take into account the cost of buying a new house when reporting the taxable amount for selling the old house. (e.g. you downsize and sell a house for $700,000 and buy a house for $350,000 - does this impact anything regarding the taxable treatment of the sell?)

DoninGA

Employee

@Papabair Buying another personal residence that cost as much or more than the sale of the prior residence to defer capital gains was removed from the tax code in 1997. Any capital gains on the sale of a personal residence over the exclusion amounts are taxable in the year of the sale.

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Mike9241

you got a 1099-S making it reportable even though there is no taxable gain. leave it off your return and you get a bill from the IRS for taxes using the 1099-S sales price and a zero cost basis which would require you to amend