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Contractor bought a rundown property, fixed it up, and sold it. I would like to include it in his Sch C. Would I then first "wash" the 1099-S slip through Sch D?
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That would avoid a matching notice.
The more I know the more I don’t know.
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There are those who believe that a return showing a milion dollars of positive cash receipts is more likely to be selected for audit than one showing half that much. I'm glad you know what IRS does, because I don't. All I know is what employees are told to do by the Internal Revenue Manual:
If there is a Schedule C or C-EZ (TY 2018 and prior) attached to the return and the principal business is listed as real estate broker, real estate sales, building, construction, or remodeling; or the principal business activity code indicates related business, for example, 233200, 238160, 238900, 531210, etc., consider REAL amount(s) fully reported when:
Gross Receipts on Schedule C or C-EZ (TY 2018 and prior) are larger than the REAL amount(s),
The TP reports the exact amount of the IR(s) on Schedule C, line 6, C-EZ, line 1 (TY 2018 and prior), or
The TP includes the REAL on an attachment.
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What's REAL?
The more I know the more I don’t know.
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I know that if an individual gets a 1099-S and if it is not shown on Sch D or 4797 the taxpayer will get a notice saying you didn't report this.
At least I'm pretty sure I know this from back in the days when I believed my clients when they told me they didn't get a 1099-S when they sold their house. They got those notices. I'm older and wiser now.
The more I know the more I don’t know.
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"I'm older and wiser now."
I'm impressed since I went the route of being older and dummer now?😉
Slava Ukraini!
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4.19.3.8.25 (12-26-2007)
Real Estate Transactions - General
...
Real estate transactions are identified on the Case Analysis screen by the literal "1099S" in the DOC TYPE field and the literal "REAL" in the INCOME TYPE field.
