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Sale of Home

Forum|Forum|2 years ago
March 30, 2024
7 replies
19 views

My clients purchased a house in 2020 with the intention of flipping the property to make money. They gave up a year later and sold it for a loss and they did not receive a 1099-s. The loss is not allowed, correct? And do I have to report it if they did not receive a 1099-s?

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Best answer by sjrcpa

A one-time venture!

I'd call it Schedule D/8949 investment loss.

sjrcpa

Level 15

Did they live in the house? Did someone?

Why do you think the loss is not allowed?

Don't be so sure they didn't get a 1099-S.

All income is reportable whether or not you get a 1099 for it.

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

Y

YLCAuthor

Level 5

A squatter lived there during covid and didn't pay rent. And I thought I read that if it wasn't rental property then a loss is not deductible? If I am wrong, then it's great for my clients. I use 8949 correct?

abctax55

Level 15

I'm curious *where* real estate has gone down in the last three years?

HumanKind... Be Both

Y

YLCAuthor

Level 5

When someone buys a crap hole building that was not able to be insured, because it was in such disrepair, that's how!

M

MICHAELMARS

Level 6

Sounds like a sale of investment property if they never lived there.

BobKamman

Level 15

Was there no 1099-S because the deal was done with a quitclaim deed to a nephew with a discount for "gift of equity" ?

Y

YLCAuthor

Level 5

There was a quit claim but it was sold to the squatter, of all people!

T

Terry53029

Intuit Community Champion

You never answered Susan's questions, but if your client never lived in it you would treat it as an investment property report sale on schedule D. (no matter you receive a 1099S or not).

H

Helpemout

Level 3

I cannot sign into Pro Series Basic.. When I do get through I get Pro Series Proffessional

Accountant-Man

Level 13

If you are a tax professional, do you report only the income shown on 1099s, or do you report all of your income?

** I'm still a champion... of the world! Even without The Lounge.

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YLCAuthor

Level 5

No, I do not only report income if shown on a 1099, I report all income. In this case, this sale will not result in a gain, it will result in a loss. I've been asking questions because they say they did not buy this property for investment purposes, but there really isn't any other way to report it.

Thanks everyone for your replies.

BobKamman

Level 15

@YLC It depends on the meaning of "investment." They didn't buy it as a rental, but they didn't buy it for personal use, either. Apparently they bought it as inventory for their house-flipping store, which might help if the loss was more than $3,000 and they want to put it on Schedule C.

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