Discussion:When a 1099S is issued on sale of personal residence - if no taxable gain, ignore?
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Discussion Forum Index --> Tax Questions --> When a 1099S is issued on sale of personal residence - if no taxable gain, ignore?
| 16 March 2008 | |
| 1099S issued on sale of personal residence - if no taxable gain, ignore? Or put on 1040, show 121 exclusion, have something for the IRS to match the 1099S to. What do you recommend . . . | |
| 16 March 2008 | |
| If I'm given the form I will put it on the Sch D and show the 121 exclusion. | |
| 16 March 2008 | |
| I agree. You better show it on the D with 121 exclusion or client will get an ugly letter next January. | |
| 16 March 2008 | |
| Lacerte won't print the information for a sale of personal residence on Schedule D, if it meets the exclusion. The diagnostics say it isn't required. I've never checked the code. I've never put a qualifying sale on Schedule D and none of my clients have ever gotten a letter. That would be probably 100 tax returns. | |
| March 16, 2008 | |
| There's a box to check in Lacerte in the 'sale of home area' to force the Sch D to print for sale of primary residence. I force it to print for all home sales, whether client brings in a F 1099S or not. What's a couple of sheets of paper (in the client copy only if efiling) compared to the potential of a nasty gram from the IRS? Perhaps overkill, but my client's really don't like those IRS letters. | |
Michaelstar (talk|edits) said: | 16 March 2008 |
| Lacerte will report this sale of a primary residence in all cases when "forced". In the input screen for dispositions - sale of home - there is a box to check to force the reporting on Schedule D. Works every time.
I suggest reporting it even if the instructions state not to report this "unless your gain is more than your exclusion amount". | |
Death&Taxes (talk|edits) said: | 16 March 2008 |
| Hey Kendrick, check out Discussion: 1099S issued on sale of personal residence - if no taxable gain, ignore?....funny but you asked the same question! | |
| 16 March 2008 | |
| IRS does not want it on return. They will not send letters for this. | |
| 17 March 2008 | |
| Yes they will. I just did a CP2000 for one. I dont think they issue them is the sale price is less than the exclusion, but this sale was for $599,900 and the nastygram arrived a few weeks ago. | |
Michaelstar (talk|edits) said: | 17 March 2008 |
| There really seem to be two schools of thought on this one.
Follow the Schedule D instructions and not report the sale at all and when and IF the notice arrives - the professionals that follow this first line of thinking can happily answer that CP2000 notice for FREE! OR Report the sale on Schedule D (as I have suggested), show the sec 121 exclusion eliminating the gain (when of course this applies) and save yourself the trouble. I have not yet had a client receive a notice but then again I always report the sale. I guess if my client received a notice informing them that they did not need to report this sale - well, I still have no notice that needs to be answered for FREE! The choice as I see it is yours. By my reporting the sale, it certainly does not increase the tax liability of the t/p and I will have disclosed that there is no gain on the sale. | |
| 17 March 2008 | |
| Death. Funny you mentioned it. When I started to put in my question, it triggered, in the history area, the old question I had put in. I tried to locate it in my contributions list, but gave up.
So decided to try it again, get some fresh responses. Can you help me? How do I do a search to find an old question? I know I can click the link in your message -- but for future use. Matter of fact, how do you get that "Discussion:" to highlite in your message? Always trying to learn the tricks that make TaxAlmanac friendlier . . . | |
Death&Taxes (talk|edits) said: | 17 March 2008 |
| Seems to me back in 2006 we had a long discussion of this and I think Chris or another NJ accountant first raised it based on a tax audit....memory fails me and since I did one search, I will let someone else do the second. | |
| 17 March 2008 | |
| Straight out of Publication 523 - Selling Your Home, page 21
Reporting the Sale 'Do not report the 2007 sale of your main home on your tax return unless: * You have a gain and you do not qualify to exclude all of it, or * You have a gain and choose not to exclude it. If you have any taxable gain on the sale of your main home that cannot be excluded, report the entire gain realized (line 5 of Worksheet 2) on Schedule D (Form 1040). Report it in column (f) of line 1 or line 8 of Schedule D, as short term or long term capital gain depending on how long you owned the home. If you qualify for an exclusion (line 9 of Worksheet 2), show it on the line directly below the line on which you report the gain. Write "Section 121 exclusion" in column (a) of that line and show the amount of the exclusion in column (f) as a loss (in parentheses). If you used the home for business or to produce rental income, you may have to use Form 4797 to report the sale of the business or rental part (or the sale of the entire property if used entirely for business or rental). See Business Use or Rental of Home, earlier, and the instructions for Form 4797.''
Tom | |
Death&Taxes (talk|edits) said: | 17 March 2008 |
| Found it: Discussion: Sale of primary residence | |
