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The Basics

Use Form 1099-S Proceeds From Real Estate Transactions to report proceeds from real estate transactions. How the property is used (personal, investment, business) will determine where the information is reported.

Follow the steps below to report real estate for personal, investment, or business use.

For more information, see IRS Instructions for Form 1099-S.

Reporting real estate for personal use:

If the 1099-S was for the sale of your main home, complete the sale of home questions under the investment income topic in our program to see if any amounts are taxable.

To report the sale of your main home:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, click Gain or loss on the sale of investments to expand, then click Sale of your main home.
  3. Continue with the interview process to enter all of the appropriate information.

Note. Be sure to check the box indicating you received a Form 1099-S so the transaction is transferred to the applicable forms/schedules within your return.

If you incurred a loss on the sale of your main home:

The IRS doesn't allow you to deduct a loss from personal-use property. If you checked Check here if you received a Form 1099-S, the sale of home transaction will be reported on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses. TaxAct will automatically adjust the loss to zero (0) using Adjustment Code "L."

Don't report the sale of your main home on your tax return unless your gain exceeds your exclusion amount. Refer to IRS Publication 523 Selling Your Home for information on the sale of your home, the ownership and use tests, and the exclusion amount.

Reporting a timeshare or vacation home (personal capital asset):

If the 1099-S was for a timeshare or vacation home, it's considered a personal capital asset to you and the sale is reportable on Federal Form 8949 and Schedule D.

A gain on this sale is reportable income. The IRS doesn’t allow you to deduct a loss since it’s personal-use property. The same would be true for inherited property if it’s a personal capital asset. Select "Adjustment Code L" so the loss is disallowed on the return.

If an inherited property is considered an investment property:

In this case, the capital gain or loss is reported on Form 8949 and Schedule D, and the loss is allowed. See the Reporting real estate for investment use: section below.

To report proceeds for property considered to be a personal capital asset:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, click Gain or loss on the sale of investments to expand, then click Capital gain or loss (Form 1099-B).
  3. Click + Add Form 1099-B to create a new copy of the form or click Edit to review a form already created.
  4. Click Quick Entry to scroll down to answer all applicable questions or click Step-by-Step Guidance to proceed with the program interview questions.

Generally, your basis in property you inherited from a decedent is the fair market value at the date of the person's death. For more information, refer to IRS Publication 551 Basis of Assets.

Reporting real estate for investment use:

If Form 1099-S was for investment property (or inherited property considered investment property), the sale is reportable on federal Schedule D:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, click Gain or loss on the sale of investments to expand, then click Capital gain or loss (Form 1099-B).
  3. Click + Add Form 1099-B to create a new copy of the form or click Edit to review a form already created.
  4. Click Quick Entry to scroll down to answer all applicable questions or click Step-by-Step Guidance to proceed with the program interview questions.

Reporting real estate for business or rental use:

If Form 1099-S was for the sale of business or rental property, then it's reportable on Form 4797 Sales of Business Property and Schedule D:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Business Income in the Federal Quick Q&A Topics menu to expand, then click Business income or loss from a sole proprietorship;
    OR click Rent and Royalty Income in the Federal Quick Q&A Topics menu to expand, then click Real estate rental income.
  3. Click + Add Schedule C or + Add Schedule E, Pg 1 to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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