Home sold, client unsure if 1099 was issued

[jklcpa]

Client is unsure if 1099 was issued for the sale of her former residence, and the gain IS definitely fully excludable and doesn't exceed the $250K exclusion for a single person.

The state has a newish form that asks various questions to determine whether gain is taxable, excludable, exempt, etc, in order to determine if state income tax should be withheld from the settlement, but the settling attorney didn't fully complete the form (ugh!), so that is no help. The fact that no box was checked to indicate exclusion makes me wonder if a 1099 may have been issued.

Would you pull a transcript to see if a 1099 was filed, just report it anyway with code H even if 1099 may not have been issued, or not report it and hope the client doesn't get a notice?  IRS transcript page says that the report may not be fully updated for the current year possibly until July.

These helpless clients are making me more than a little short-tempered at this point.  Grrr!

 

 

 

[scottmcfly]

What is the downside of assuming that 1099S was issued and reporting it on 8949 with exclusion code?  That's what I do.  Better than client getting a letter in a couple of years. ( and then me having to deal with it then)

[joanmcq]

I always report them, regardless of 1099-S.  Then no chance of a notice later.

[ILLMAS]

A wage and earnings report from the IRS should solve the mystery.

[Gail in Virginia]

I am seeing most lawyers around here include a substitute form 1099S in the closing packet.  Then the client tells me they never got a tax form, and even if they look through the packet they will most likely overlook it because it doesn't really look like a tax form.  I usually just put it on the return figuring what can it hurt?

[Lion EA]

I put it on the return. Quick and easy.

[Max W]

2 hours ago, ILLMAS said:

A wage and earnings report from the IRS should solve the mystery.

Wage & Income transcripts are not available until the end of May and the issuer, being a lawyer probably wouldn't have reported it to the IRS, anyway.

[jklcpa]

1 hour ago, Max W said:

Wage & Income transcripts are not available until the end of May and the issuer, being a lawyer probably wouldn't have reported it to the IRS, anyway.

Exactly, and I don't like to report anything to IRS that isn't required or necessary.  Since I'm unsure, it will be reported. 

The post was as much as rant as anything else. Part of my annoyance is that this person comes to me every few years and does her returns by hand in other years.  She makes little mistakes here and there, and she carries out the results to include the cents.     

I'm just really fed up with people in general right now.

[Lee B]

This sounds like a client that deserves a significant fee increase !

[Catherine]

Report.

Hike the fee.