Question

Selling an investment property

Forum|Forum|4 years ago
January 26, 2022
1 reply
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I purchased a property with someone (Not my wife). We just paid the selling price together, fixed it and sold it. He took 50% of the profit and I did the same. How will I report this on my taxes (I file jointly with my wife)

G

GeorgeM777

While you may be only responsible for paying tax on your one-half of the gain, what gets reported on your return will depend on additional factors. For example, in connection with the sale of this property, did you receive a Form 1099-S? Generally, the person responsible for closing the transaction needs to file the 1099-S and provide a copy to the sellers. The person responsible for closing the transaction is usually the settlement a

gent. If there is no settlement agent, then a mortgage broker may be the person responsible for filing the 1099-S.

If you did receive a 1099-S, does it reflect that you received all of proceeds? If that is the case, you will likely need to adjust your basis (i.e. cost of the property) to reflect that one half of the proceeds went to the other party in the transaction.

Additionally, do you know your basis (i.e. cost) in the property? You will need to add the cost of the repairs you made to the property to your basis in order to arrive at your adjusted basis. Follow-up with any additional information you can provide, and as a reminder, do not include any personal identifiable information in your response.

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