1099-s?

[SueBaby]

I have a client that has a 1099-S and I put it on Sch D. But she said she bought her house for 120,000 and sold it for only 77,000.
That not only made a big loss but her AGI is only 16,000 and her deductions is way over 20,000. Does this look right? I've never seen anyone live over their income! I need advice. Thank you very much.

[Matt Sova]

Personal or investment

If it was their personal residence then no loss is recognized, use 77,000 as cost basis to match the 1099-S. If it was investment or rental property then loss would be deductible.

[Unregistered]

What types of deductions does she have that puts it over 20,000?

[SueBaby]

What types of deductions does she have that puts it over 20,000?

She has documents from the Dr. medical and drugs because of cancer and a mortgage along with contributions. All is documented.

[Brian EA]

I have a client that has a 1099-S and I put it on Sch D. But she said she bought her house for 120,000 and sold it for only 77,000.
That not only made a big loss but her AGI is only 16,000 and her deductions is way over 20,000. Does this look right? I've never seen anyone live over their income! I need advice. Thank you very much.

SueBaby,

Was that a personal residence or an invstment property? If it was a personal property you do not have to report it. Just delete it from Sch D.When you delete Sch d is her AGI still $16000?. That's no big deal .A lot of folks have that kind of AGI.

If it was a rental property then the loss becomes deductible. Have you considered the depreciation she took over the years.

Her medical expenses can be a lot considered that she is a cancer patient. She probably used the proceeds from the sale of the house to pay her medical bills.

You need to provide more info on this client

[SueBaby]

SueBaby,

Was that a personal residence or an invstment property? If it was a personal property you do not have to report it. Just delete it from Sch D.When you delete Sch d is her AGI still $16000?. That's no big deal .A lot of folks have that kind of AGI.

If it was a rental property then the loss becomes deductible. Have you considered the depreciation she took over the years.

Her medical expenses can be a lot considered that she is a cancer patient. She probably used the proceeds from the sale of the house to pay her medical bills.

You need to provide more info on this client

Yes, it was a rental property. She rented it and last year sold and moved to another state to be near her Dr and hospital. So do I keep it on or what? It doesn't look right to me.

[Gretel]

If it is rental property, there should have been a Sch.E filed with income, expenses and depreciation. You need the depreciation info in order to figure her gain/loss.

[SueBaby]

If it is rental property, there should have been a Sch.E filed with income, expenses and depreciation. You need the depreciation info in order to figure her gain/loss.

Yes I have that and all her expenses she took on it. (Which is a loss.) But what about the sch D? I haven't had one that had such a great loss plus her living expenses is a lot higher than her income. None of this return looks good to me to transmit, although she has all of written documents. So why am I afraid?????

[oceanlovin'ea]

4797

Sale of rental property goes on 4797, splitting out land from the house.

Linda F

[Brian EA]

Yes I have that and all her expenses she took on it. (Which is a loss.) But what about the sch D? I haven't had one that had such a great loss plus her living expenses is a lot higher than her income. None of this return looks good to me to transmit, although she has all of written documents. So why am I afraid?????

Ok SueBaby.

I know you use Drake. On the depreciation screen indicate the date property was sold. Property type is 1250. If land is involved then you will need to separate their cost and selling price.If the return was done with all the depreciation the software will capture the depreciation. It will automatically take it ot 4797 then to sch D. Land is 1231 property and goes on 4797 part 1. This is all on the depreciation screen

Let me know how it went

[SueBaby]

Ok SueBaby.

I know you use Drake. On the depreciation screen indicate the date property was sold. Property type is 1250. If land is involved then you will need to separate their cost and selling price.If the return was done with all the depreciation the software will capture the depreciation. It will automatically take it ot 4797 then to sch D. Land is 1231 property and goes on 4797 part 1. This is all on the depreciation screen

Let me know how it went

You are so right. Not afaid anymore. Transmit and hope for the best. Thanks a lot everyone!!!