1099-S given to a contractor

Forum|Forum|5 years ago
January 9, 2021
6 replies
29 views

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?

ProSeries Professional

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Best answer by sjrcpa

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.

sjrcpa

Level 15

That would avoid a matching notice.

The more I know the more I don’t know.

BobKamman

Level 15

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:

4.19.3.8.25.2 (09-21-2020)

Real Estate Transactions Miscellaneous

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:
1. Gross Receipts on Schedule C or C-EZ (TY 2018 and prior) are larger than the REAL amount(s),
2. The TP reports the exact amount of the IR(s) on Schedule C, line 6, C-EZ, line 1 (TY 2018 and prior), or
3. The TP includes the REAL on an attachment.

sjrcpa

Level 15

What's REAL?

The more I know the more I don’t know.

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