1099-S Rental

Forum|Forum|3 years ago
April 9, 2023
1 reply
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Greetings, and TY in advance.

I have a "Substitute Form 1099-S" from selling a rental property (a former primary residence but rented for 15 years). However, there's no selection for the 1099-S direct inputs, and I have noted the "Sale" of the property in the rental property section of TT Premier 2022.

My concern is where do I enter the "Gross Proceeds" data, acquired/sold dates, cost of the property, and outstanding mortgage balance, to determine tax liability?

TY, Franklin

HelenC12

Form 1099-S (or a substitute 1099-S) is not entered in TurboTax like a 1099-INT form or a W-2 so you won't find an entry screen specifically for the 1099-S form. The information on the form is used to report the sale.

Outstanding mortgage balance does not factor in your rental sale profit or loss.

As you go through the Rental Sale interview, TurboTax will ask you to confirm prior depreciation. The amount of prior depreciation will be shown. It should not be 0.

Depreciation expense is an item that landlords may not know about and the fact that when you sell your rental, you have to claim all the previous years’ depreciation expense. This is called Depreciation Recapture and it's taxed in the year of sale. You may have to pay 25% on your depreciation recapture. See IRS Publication 544 Chapter 3 Depreciation Recapture, page 27.

In TurboTax, you have to indicate you sold the rental property in both the Property Profile section and the Assets/Depreciation section of the program. You will be prompted to enter sales information during the interview in the Assets/Depreciation section of TurboTax. Each asset needs to be sold and assigned a portion of the sales proceeds.

Please see: I sold my rental property. How do I report that?
Please see Critter-3's previously posted answer on how to allocate the gross rental sales price to the sale of each rental asset. Click here.

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