If I sold rental property in a short sale and received a Form 1099-S, how do I report it on my return?
Form 1099-S reports the sale portion of the transaction.
Report the sale of your rental property on Form 4797. The sales price is the gross proceeds you received in giving up the property. That’s the amount that was paid down or paid off, plus any other consideration you received in the transaction.
Compute your gain or loss in the usual way — Sales price minus your adjusted basis in the property. You might have depreciation recapture, and you might be subject to loss limitations depending on the circumstances.
You’ll likely receive a Form 1099-C that reports your lender’s discharge of indebtedness. You’ll receive Form 1099-C when your lender cancels your debt, not necessarily in the same year you receive Form 1099-S. There are separate rules for reporting cancellation of debt and potential income associated with it.
Learn more about letter 545, why you received it, and how to handle an IRS 545 letter with help from the tax experts at H&R Block.
The W-4 Form is the IRS document you complete for your employer to determine how much should be withheld from your paycheck for federal income taxes and sent to the IRS. Accurately completing your W-4 will help you avoid overpaying your taxes throughout the year or owing a large balance at tax time.
Learn what to do if city taxes paid are missing on your W2 with help from the tax experts at H&R Block.
An IRS appeals officer made a decision on your innocent spouse relief claim. Learn more about IRS letter 3288 from the tax experts at H&R Block.