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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2829
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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My mother-in-law sold here house and received a 1099-s from

Customer Question

My mother-in-law sold here house and received a 1099-s from the title company. The gross proceeds box is blank. Buye's portion of RE taxes has a small amount. Do we have to report it on her taxes?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Correcting spelling, etc.:My mother-in-law sold her house and received a 1099-s from the title company. The gross proceeds (box 2) is blank. Buyer's portion of RE taxes (box 5) has a $133.59. Nothing else is filled in (just her name and social security number). We believe she qualifies for the personal exemption. I know that if she had signed an assurance with the title company, they would not have sent her the 1099-s. I think she may have signed one, which is why I think they sent this 1099-s with nothing in the gross proceeds box. Do we have to report the sale on her taxes? Thank you.
Expert:  Robin D. replied 1 year ago.

Hello,
Generally your mother in law would not have to report the sale if she is allowed to use IRC 121 and exclude gain (up to $250,000 of gain for single).
But if you receive an informational income-reporting document such as Form 1099-S (PDF), Proceeds From Real Estate Transactions, you must report the sale of the home even if the gain from the sale is excludable.

When the 8949 is prepared, enter “H” in column (f). Enter the exclusion as a negative number (in parentheses) in column (g). See the instructions for Form 8949, columns (f), (g), and (h). Complete all columns.

She will not be taxed on the gain.

Expert:  Robin D. replied 1 year ago.

Please let me know if you need more information before you rate.

Expert:  Barbara replied 1 year ago.
Different expert here - my name is ***** ***** I have a different answer.
Since your mother-in-law sold her personal residence, the title company was correct in issuing the 1099-S with Box 2 blank. This alerts the IRS that the property that was sold DOES NOT have to be reported on Form 8949 and Schedule D because there is nothing (no amount in Box 2) to report.
The issue is with the amount in box 5-real estate taxes, which shows certain real estate tax on a residence charged to the buyer at closing. If your mother-in-law already paid the real estate tax for the period that included the sale date, she would subtract the amount in Box 5 from the amount already paid to determine her deductible real estate tax. But if she has already deducted the real estate tax in a prior year, the amount in Box 5 would be reported as income on the "Other Income" line of the appropriate income tax form. On Form 1040, it is Line 21.
Please let me know if you require further information or clarification.
Thank you and best regards,
Barb
Expert:  Barbara replied 1 year ago.
I see you viewed my response earlier today.
Please let me know if I can assist you further. If so, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me.
Best regards,
Barb

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