giogis245 Posted February 2, 2021 Report Share Posted February 2, 2021 I am having a brain fart and not sure if I need to enter anything? They lived in house for 4 years qualify to not pay taxes on proceeds. Quote Link to comment Share on other sites More sharing options...
Sara EA Posted February 2, 2021 Report Share Posted February 2, 2021 You have to report it if they received a 1099S, but code it on the Sch D to claim the exemption. 4 Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 2, 2021 Report Share Posted February 2, 2021 I have always reported it then claimed the exemption to ensure that my client doesn't get a letter, which I would have discuss with the client and respond to the letter. 6 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 2, 2021 Report Share Posted February 2, 2021 I agree and report it, claiming the exemption. A client signs a lot of paperwork during their closing and might not know they received Form 1099-S in their packet, or it might be mailed to their old address. It takes almost no time to report it and exclude it; but it takes a lot of time to answer the IRS letter, calm your client, and even figure out what happened in the past. 7 Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted February 2, 2021 Report Share Posted February 2, 2021 I have had many clients tell me they did not receive a 1099S but when I ask for the closing packet, lo and behold! there is the 1099S. I had an interesting one this week where the homeowner was deceased, and the mother was the sole heir (no will.) The 1099s was made out to mom, sole heir of son's estate and did not show any tax identification number! I had to call the title company to see whose tax id they actually reported this in - mom or the estate. 5 Quote Link to comment Share on other sites More sharing options...
ETax847 Posted February 2, 2021 Report Share Posted February 2, 2021 Agree with those above. 5 minutes of your time in reporting it can save many headaches of having to deal with the IRS down the road. 8 Quote Link to comment Share on other sites More sharing options...
Patrick Michael Posted February 3, 2021 Report Share Posted February 3, 2021 I also believe it starts the clock for the statute of limitations in case there are issues down the road. Leave it off and the return is not complete so no running clock. 4 Quote Link to comment Share on other sites More sharing options...
Possi Posted February 3, 2021 Report Share Posted February 3, 2021 My client is 66, disabled, and receiving Soc Sec. He took $12k from his IRA. So far, he's not required to file. BUT, he sold his home and he didn't yet receive his second stimulus payment. So, I was going to file so that the 1099S won't come back on me, and to claim the stimulus. Should I? 3 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 3, 2021 Report Share Posted February 3, 2021 Yes. You never know when a 1099S is out there. What Gail said. And, if they look at her return when she's 69 and disabled, will she be able to recreate the house basis? Just report it now and start the SOL. What Patrick said. Report it. Depending on your software, just one/two lines to report and claim 121. You don't have to charge her any extra if you don't want to. But report it. 3 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 3, 2021 Report Share Posted February 3, 2021 On 2/1/2021 at 7:54 PM, giogis245 said: I am having a brain fart and not sure if I need to enter anything? They lived in house for 4 years qualify to not pay taxes on proceeds. Tax would be on the gain, not the proceeds. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 3, 2021 Report Share Posted February 3, 2021 On 2/1/2021 at 8:30 PM, Sara EA said: You have to report it if they received a 1099S, but code it on the Sch D to claim the exemption. The code is on the 8949, and it's conveniently H. 3 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 4, 2021 Report Share Posted February 4, 2021 Always, always, ALWAYS report the house sale and exclude the gain. The last thing anyone needs or wants is a nastygram from the IRS, two years post-sale, demanding tens of thousands of dollars in taxes not actually owed. The younger folks just have to change their pants before they call you, screaming or in tears or both, and I frequently wonder how many heart attacks those letters have caused in the elderly. 3 Quote Link to comment Share on other sites More sharing options...
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