Sch D (sale of personal residence)

[ILLMAS]

If a TP is under the exclusion amount, should the sale appear on Sch D Yes or No?

Thanks

MAS

[Yardley CPA]

Doesn't that depend on whether they receive a 1099S? I was under the impression that if they receive a 1099S it should be reported. With that said, what harm is there in showing it on Schedule D even if they didn't receive a 1099S?

[Catherine]

I always show it with the exclusion -- prevents nastygram letters demanding money later. 1099-S's sometimes get sent to the *sold* address, after the USPS forwarding time expires. Just because your client says they didn't get one, doesn't mean one wasn't sent. Remember, most people have a minor heart attack when one of those IRS envelopes shows up.

[ILLMAS]

The issue here is that it doesn't appear once I enter all the necessary data on sale of personal residence worksheet. For example on a joint return, house was sold for $300k and bought for $175k, nothing flows to Sch D.

[Pacun]

Enter the info and give it to the client. Remember that the IRS doesn't know that they owned the house or if they lived in the house or the basis for house.

[David1980]

If a TP is under the exclusion amount, should the sale appear on Sch D Yes or No?

Thanks

MAS

No, it's not required to be reported at all. Unless there is taxable gain. Or if the taxpayer received 1099-S.

Though, I can't see any harm in reporting it when not required.

[grandmabee]

it won't go to D but it will show on page two of the 8949 for long term sale with codes so loss or gain won't transfer to D. gain or loss column is zero

[ILLMAS]

No, it's not required to be reported at all. Unless there is taxable gain. Or if the taxpayer received 1099-S.

Though, I can't see any harm in reporting it when not required.

Thanks

[Jack from Ohio]

Pub 523

Reporting the Sale

Do not report the 2013 sale of your main home on your tax return unless:

• You have a gain and do not qualify to exclude all of it,

• You have a gain and choose not to exclude it, or

• You received Form 1099-S.

[kcjenkins]

Jack, I know that is what it says, but since the clients don't always get the 1099S that was filed, I would put it in anyway. Nothing changes, but if a 1099S was filed, you are covered. If not, no harm done, and you can show the client were it's reported, so they have peace of mind.

[michaelmars]

I always show it for a sale over $500k. how does the irs know there is basis to reduce the gain.

[mcb39]

Pub 523

Reporting the Sale

Do not report the 2013 sale of your main home on your tax return unless:

• You have a gain and do not qualify to exclude all of it,

• You have a gain and choose not to exclude it, or

• You received Form 1099-S.

This may be true, but I have seen not reporting it come back to bite the taxpayer. Actually it was the state that questioned it because of RE transfers. I always report it right away to save confusion later. How do you charge a client to settle something with the government when you were the one who did not enter it on the tax return?

[ILLMAS]

I will rephrase my original question, in ATX if I enter a sale of personal residence (independently of a 1099S) which is below the $500K joint exclusion, let's say there was a 100k profit from the sale, should the $100k appear on Sch D just to show the sale or should it appear on another form. In my case, the Sch D is blank and I want verify that should be the case, I appreciate everyone input so far.

[JohnH]

This may be true, but I have seen not reporting it come back to bite the taxpayer. Actually it was the state that questioned it because of RE transfers. I always report it right away to save confusion later. How do you charge a client to settle something with the government when you were the one who did not enter it on the tax return?

I don't mind charging the client in this situation. I followed the rules by not mentioning it when the original return was prepared, and I'm following the rules when I handle the response if a CP2000 comes. Personally, I've never seen but a couple of CP2000's in this type of situation. Both were a bit unusual and understandable in hindsight. (But maybe I'd handle it differently if I lived in a different state.)

[Lion EA]

It'll show on the 8949.

I've had clients tell me they didn't get a 1099-S, but it was with dozens of pages of their closing papers. They saw too much at their closing to remember it, but it was sent to the IRS.

[Richcpaman]

It'll show on the 8949.

I've had clients tell me they didn't get a 1099-S, but it was with dozens of pages of their closing papers. They saw too much at their closing to remember it, but it was sent to the IRS.

Yes, the 1099-S is in all that paperwork from the closing...

You have to get "something" after they charge you $75-150 for "tax document preparation" on the settlement sheet.

If they had a gun, they would be in jail for some of this stuff...

Rich

[ILLMAS]

it won't go to D but it will show on page two of the 8949 for long term sale with codes so loss or gain won't transfer to D. gain or loss column is zero

Thanks I had not seen your response and thank you Lion too.

[joanmcq]

I will rephrase my original question, in ATX if I enter a sale of personal residence (independently of a 1099S) which is below the $500K joint exclusion, let's say there was a 100k profit from the sale, should the $100k appear on Sch D just to show the sale or should it appear on another form. In my case, the Sch D is blank and I want verify that should be the case, I appreciate everyone input so far.

There is a checkbox on the sale of personal residence tab to include fully excludable gain on the Sch D.