House sales

Forum|Forum|3 years ago
March 24, 2023
4 replies
15 views

When someone sells their house for under $250,000.00 ($500,00.00 if married ) even though it is tax free do they still have to show it on the tax return?

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IRonMaN

Level 15

If there is a 1099S, yes. But most of the time the clients says they never got one even if they did, so sometimes it's safer just to report it.

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dascpa

Level 11

If it's a reputable Title Company they reported it to the IRS on the 1099-S. Your client may not understand what the form is, lost it, etc. It's better to be safe than to play penpals with the IRS after the client's heart attack of getting a notice showing tons of tax due. I report 100% of all residence sales.

Accountant-Man

Level 13

When Sec. 121 was created (1997?), the INSTRUCTIONS to Sch D stated that if your gain was below the maximums you were not required to report the sale.

Since the IRS does not know the cost or adjusted basis, you would be foolish to fail to report it if the sales was for more than 250/500, regardless of gain.

Sales price 250/500 or less? You cannot have a taxable gain. More than? Without proof? How to prove it's not taxable unless you report it.

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sjrcpa

Level 15

"Sales price 250/500 or less? You cannot have a taxable gain."

Sure you can - if you did not own and live in it for 2 of the 5 years prior to sale; if you already used the exclusion in the last 2 years.

The more I know the more I don’t know.

Skylane

Intuit Community Champion

Closing companies often include the 1099s with the other closing docs. I’ve seen attorneys just keep them in their files without distributing…. It probably exists… if they are told to look for it.

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