Where to Record a 1099-S on Taxes

Selling a house or any other real estate can be complicated and may have tax implications for you. You must report the sale of your home or other buildings, any land whether it has improvements or not, or any interest in a condominium or cooperative housing project. Almost any real estate sale is covered, but mobile homes not on a permanent foundation are excluded.

1099-S Reports Sale

A 1099-S is used to report the sale. The agent who closes the real estate transaction must file the 1099-S with the Internal Revenue Service. If there is no closer, the 1099-S must be filed by a mortgage lender, any broker who participated in the deal or the person who acquires the greatest interest in the property or is listed first on the ownership transfer documents. The 1099-S lists those involved in the sale and its gross proceeds -- who got the money from the sale.

Exclusions Allowed

You can exclude from your income tax any gain or profit from the sale of your home if you owned it and lived there for at least two years in the preceding five years. You can exclude up to $250,000, or $500,000 if you’re married and filing a joint return. You can exclude gain on only one house and not on any rental property you sell. The exclusions apply to both individual houses and condominium or cooperative apartments.

Other Regulations

There are special exemptions for military service members, people with disabilities, or owners whose home was destroyed by some accident or natural disaster. You'll have to complete a Form 8949 to document the transaction, whether it is a gain or a loss. You'll be taxed on any gain above the exempt amount but cannot deduct any loss. If you finance the sale yourself, you'll have to report both principal and interest payments.

Capital Gains

If you report a gain, you need to complete Form 8949 with details of the transaction and a Schedule D to compute the tax on capital gains. You will figure either long- or short-term capital gains, depending on how long you owned the property. This applies only to gains above the exempt limits of $250,000 single or $500,000 married. Any gain above the excluded amount will be reported as taxable income on Line 13 of your Form 1040.


About the Author

Bob Haring has been a news writer and editor for more than 50 years, mostly with the Associated Press and then as executive editor of the Tulsa, Okla. "World." Since retiring he has written freelance stories and a weekly computer security column. Haring holds a Bachelor of Journalism from the University of Missouri.