Eli Posted March 15, 2010 Report Share Posted March 15, 2010 Clients moved from Texas to New Mexico for new job positions. They sold their home at about a $5000 loss. They received a 1099-S from the buyer (Prudential). Would this sale go on Sch D as sale of principal residence? Is Sch D necessary since they have loss? Home was purchased just a few months prior to sale. Thanks! Eli Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted March 15, 2010 Report Share Posted March 15, 2010 Although not required, I normally show the sale and let if flow to the D as a non-deductible personal loss just to make sure the IRS sees it on the return. These things are normally big dollar amounts (at least in CA they used to be). I don't like letters from the IRS when they can be avoided. And if you do get a letter, you just show the IRS the D and it goes away. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 15, 2010 Report Share Posted March 15, 2010 Yes, you do need to show it. The reason is that the 1099S only shows the sale price, so if you do not report it, it looks to the IRS matching computer like you left off a lot of reported income, and you get a nasty letter from them about that. When you file the D, you show not only the price, but also the basis, so that the matching is satisfied. Remember, the IRS does not know it's a loss until they see the Sch D. Quote Link to comment Share on other sites More sharing options...
Eli Posted March 16, 2010 Author Report Share Posted March 16, 2010 Thank you both!! Eli Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.