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A vacation home is a personal use capital asset, meaning a gain on the sale is reportable and a loss is NOT deductible. The taxpayer would report the transaction on federal Schedule D and enter the data on Form 1099-B Capital Gains Transaction

To enter Form 1099-B for your capital gain or loss transactions in TaxACT:
  1. From within your TaxACT return (Online or Desktop) click on the Federal Q&A tab
  2. Click Investment Income to expand the category, then click Gain or loss on sale of investments
  3. Click Capital gain or loss (Form 1099-B)
  4. Click Add to create a new copy of the form or click Review to review a form already created 
  5. The program will proceed with the interview questions for you to enter or review the appropriate information

Normally, a timeshare and an IRS Form 1099-S Proceeds from Real Estate Transactions received for a second (vacation) home is a personal use capital asset reportable on Schedule D, where a gain is reportable and a loss is not deductible. If you receive a 1099-S for the sale of vacation home, you will need to report the sales proceeds amount. If the result is a loss, then you will need to adjust the basis in the program to show NO loss on Schedule D. 

If the vacation home was used for rental or investment, or if you claimed depreciation on the property, the sale would be reported on IRS Form 4797 Sales of Business Property. The data would be entered on the document Sale of Business Property in TaxACT. 

You can also refer to IRS Publication 527 Residential Rental Property for additional information. 

See IRS Publication 544 Sales and Other Dispositions of Assets for more information regarding the sale of vacation homes.

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