TP sold 2nd home for a loss

[AZ-Tax]

TP sold house they had for 30 years and took advantage of the capital gains exclusion in TY 2013. 2014 they sold their 2nd home for a loss. Never converted this house as a rental but for some reason the title Co. issued the TP a 1099-S. I am not aware of any loss the TP can take on this property but I thought I would post it to see if I am missing something.

[Gary2]

TP sold house they had for 30 years and took advantage of the capital gains exclusion in TY 2013. 2014 they sold their 2nd home for a loss. Never converted this house as a rental but for some reason the title Co. issued the TP a 1099-S. I am not aware of any loss the TP can take on this property but I thought I would post it to see if I am missing something.

I don't think the rules for issuing the 1099-S have an exception for selling at a loss, only for being able to take the 121 exclusion. Since they clearly couldn't take the 121 exclusion in 2014, my take is that issuing the 1099-S is correct.

Even if the title company wasn't required to issue it, they did. So now you have to report it as a non-deductible personal loss on the 8949. It wasn't a rental, presumably was never used for business, and it seems unlikely you can argue it was investment property unless they never actually used it.

[AZ-Tax]

Correct

I don't think the rules for issuing the 1099-S have an exception for selling at a loss, only for being able to take the 121 exclusion. Since they clearly couldn't take the 121 exclusion in 2014, my take is that issuing the 1099-S is correct.

Even if the title company wasn't required to issue it, they did. So now you have to report it as a non-deductible personal loss on the 8949. It wasn't a rental, presumably was never used for business, and it seems unlikely you can argue it was investment property unless they never actually used it.

Nope never was a rental, never used for any business purpose and they used it personally so no investment property.