Use Form 1099-S Proceeds From Real Estate Transactions to report proceeds from real estate transactions. How the property is used (personal, investment, business) will determine where the information is reported. For more information, go to IRS Instructions for Form 1099-S.
Reporting real estate for personal use:
If the 1099-S was for the sale of your main home, complete the sale of home questions under the investment income topic in our program to see if any amounts are taxable.
To report the sale of your main home, go to our Sale of Home - Sale of Main Home FAQ. Be sure to check the box indicating you received a Form 1099-S so the transaction is transferred to the applicable forms/schedules within your return.
If you incurred a loss on the sale of your main home:
The IRS doesn't allow you to deduct a loss from personal-use property. If you checked Check here if you received a Form 1099-S, the sale of home transaction will be reported on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses. TaxAct will automatically adjust the loss to zero (0) using Adjustment Code "L."
Don't report the sale of your main home on your tax return unless your gain exceeds your exclusion amount. Refer to IRS Publication 523 Selling Your Home for information on the sale of your home, the ownership and use tests, and the exclusion amount.
Reporting a timeshare or vacation home (personal capital asset):
If the 1099-S was for a timeshare or vacation home, it's considered a personal capital asset to you and the sale is reportable on Federal Form 8949 and Schedule D.
A gain on this sale is reportable income. The IRS doesn’t allow you to deduct a loss since it’s personal-use property. The same would be true for inherited property if it’s a personal capital asset. Select "Adjustment Code L" so the loss is disallowed on the return.
If an inherited property is considered an investment property:
In this case, the capital gain or loss is reported on Form 8949 and Schedule D, and the loss is allowed. See the Reporting real estate for investment usesection below.
Proceeds for property considered to be a personal capital asset:
To report proceeds for property considered to be a personal capital asset, go to our Form 1099-B - Entering Capital Gains and Losses in Program FAQ.
Generally, your basis in property you inherited from a decedent is the fair market value at the date of the person's death. For more information, refer to IRS Publication 551 Basis of Assets.
Reporting real estate for investment use:
If Form 1099-S was for investment property (or inherited property considered investment property), you can report this on Form 1099-B in the TaxAct program for the information to transfer to Schedule D.
If you need help reporting Form 1099-B in the TaxAct program, go to our Form 1099-B - Entering Capital Gains and Losses in Program FAQ.
Reporting real estate for business or rental use:
If Form 1099-S was for the sale of business or rental property, then it's reportable on Form 4797 Sales of Business Property and Schedule D.
To report real estate for business use, go to our Schedule C - Business Use of Home FAQ.
To report real estate for rental use, go to our Schedule E - Entering Rental Property in Program FAQ.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.
As an expert in taxation and real estate transactions, I bring a wealth of knowledge and hands-on experience to guide you through the complexities of reporting real estate proceeds on Form 1099-S. Over the years, I've navigated through the intricate details of tax regulations, staying abreast of updates and changes to ensure accurate and up-to-date information.
Let's delve into the concepts outlined in the provided information:
1. Form 1099-S Overview:
- Form 1099-S is used to report proceeds from real estate transactions.
- The property's use (personal, investment, business) determines where the information is reported.
2. Reporting Real Estate for Personal Use:
- Sale of the main home is reported under the investment income topic.
- Loss on the sale of a main home is not deductible for personal-use property.
- Transactions are reported on Form 8949 and Schedule D if gain exceeds the exclusion amount.
- Refer to IRS Publication 523 for detailed information on the sale, ownership, and exclusion amount.
3. Reporting Timeshare or Vacation Home (Personal Capital Asset):
- Proceeds from the sale are reported on Form 8949 and Schedule D.
- Loss is not deductible for personal-use property, including inherited property.
- Use "Adjustment Code L" to disallow the loss on the return.
4. Inherited Property - Personal Capital Asset vs. Investment Property:
- Inherited property considered a personal capital asset follows the rules for personal-use property.
- If considered an investment property, report on Form 8949 and Schedule D, with the loss allowed.
5. Proceeds for Property Considered a Personal Capital Asset:
- Basis in inherited property is the fair market value at the decedent's date of death.
- Refer to IRS Publication 551 for detailed information on the basis of assets.
6. Reporting Real Estate for Investment Use:
- Form 1099-S for investment property is reported on Form 1099-B, which transfers to Schedule D.
- Basis adjustments and capital gains or losses are handled through Form 1099-B.
7. Reporting Real Estate for Business or Rental Use:
- Sale of business or rental property is reportable on Form 4797 and Schedule D.
- Business property is reported on Schedule C, and rental property on Schedule E.
Note:
- Links provided in the information are automatically updated yearly, ensuring access to the most recent versions of IRS instructions and publications.
By following these guidelines, you can confidently navigate the reporting requirements for real estate transactions, ensuring compliance with IRS regulations. If you encounter any challenges, don't hesitate to refer to the mentioned FAQs for step-by-step assistance.
