Main Home Sale

[Adri]

Taxpayers divorced and sold their main home after 15 years living there. Never was a rental, never was a home office. My client is the husband doesn't recall receiving a 1099 for the sale proceeds. He also didn't buy another home with those proceeds.  I am working on his Home Sale Worksheet and not sure where some of the info. for example, where do I enter the amount of the proceeds his ex wife received. 

Selling Price   882,000.00    OK 

Closing Costs  37,000.00 

First and second mortgage payoff 144,895.00 

Other Expenses like county tax unpaid by seller & owner's policy paid by seller  15,941.00 

After all expense $684,164.00 was paid to them and each got half of that. 

They built their own home and total cost including the land, and later improvements to the property were a total of 393,690. 

I would really appreciate any input on this.  thank you! 

[Jim-from-Ohio]

mortgage pay-off = not part of the calculation

[IRonMaN · Accepted solution]

Check the closing package that was given to him - if a 1099 was generated, it would be in with the closing documents.  If they were divorced when the home sold and it was jointly owned, they each report half of the selling price and the cost plus improvements and closing costs are also split in half and reported on each return.

[abctax55]

"....county tax unpaid by seller"

Those taxes would not be closing costs; the taxes would be deducted on Sch A(s) and subject to any SALT limitations.

[Adri]

Thank you. 

[Adri]

Thank you.  

[George4Tacks]

https://www.irs.gov/businesses/small-businesses-self-employed/sale-of-residence-real-estate-tax-tips....

Maybe IRS really doesn't care if it is reported:

Reporting the sale

Report the sale or exchange of your main home on Form 8949, Sale and Other Dispositions of Capital Assets, if:

• You have a gain and do not qualify to exclude all of it,
• You have a gain and choose not to exclude it, or
• You received a Form 1099-S.

If it were me, I would report it anyway. You have already spent this much time, get it right and bill the client. The next time will be much easier

[Adri]

Thank you for your answer 

[Adri]

Thank you for your answer. 

[qbteachmt]

"He also didn't buy another home with those proceeds."

That provision hasn't applied since the 1990s.

[BobKamman]

Who owned the house when it was sold?  Had the decree already awarded it to the husband, with a provision that the ex-wife get half the proceeds when it was sold?  Or was it still jointly owned?