Capital Gains and Losses - Sale of Vacation Home
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A second home, or a timeshare, used as a vacation home is a personal use capital asset. A gain on the sale is reportable income, but a loss is NOT deductible. If you receive Form 1099-S Proceeds from Real Estate Transactions for the sale of your vacation home, you need to report it in the TaxAct program on Form 1099-B. The TaxAct program will transfer the information to Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses.

To report the sale of your vacation home or Form 1099-S on Form 1099-B in the TaxAct program, go to our Form 1099-B - Entering Capital Gains and Losses in Program FAQ.


Loss on Sale of Vacation Home

If the result of the sale of your vacation home is a loss, then you will need to adjust the basis so no loss is reported. On the screen titled Investment Sales - Adjustment Code(s), select "L - Other Non-Deductible Loss (including Personal Loss)" from the Other adjustment code drop-down, and enter the adjustment amount equal to the loss.

Second Home Held for Investment

If the second home was held for investment purposes, a loss on the sale would be deductible, so an adjustment would not be necessary. The sale of a second home held for investment can be entered using the steps above.

Second Home Rented

If the second home was used for rental purposes, or if you previously claimed depreciation on the property, the sale would be reported on Form 4797 Sales of Business Property. To access Form 4797 in the TaxAct program, go to our Form 4797 - Sale of Business Property Sale of Asset Entry into Program FAQ. The sale of a second home used for rental purposes needs to be reported on Schedule C, Schedule E, or Schedule F, depending on which one applies to you.


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