Sale of Rental property in 2017--Constructively received money in 2018

[Gene V]

My client sold rental property on 12/19/2017, the 1099-S shows 12/29/2017, however, he didn't received the money until January 5, 2018, the check had a issue date of January 2, 2018. Since, my client didn't constructively received the money until 2018, I'm showing the sale in 2018. Any suggestion on how to report this sale?

suppose the IRS will send a CP2000 for unreported income, or is there a way to avoid the CP2000

I'm thinking that the escrow office got the money from the buyer (which would then be income received by an a third party, which would mean the income would
be reported in 2017)

[TaxGuyBill]

As your last sentence said (which was probably added after your original statements), I suspect that it may have been "constructively received" by the seller's "agent" in 2017.

If that isn't the case and it was constructively received in 2018, I suppose you could just report the 1099-S with the sale Basis as being the same amount as the sale Proceeds on the 1099-S. That would report the 1099-S on the tax return and give a $0 gain/loss for 2017. Then just report the 'real' numbers in 2018.

[Gene V]

As your last sentence said (which was probably added after your original statements), I suspect that it may have been "constructively received" by the seller's "agent" in 2017.

If that isn't the case and it was constructively received in 2018, I suppose you could just report the 1099-S with the sale Basis as being the same amount as the sale Proceeds on the 1099-S. That would report the 1099-S on the tax return and give a $0 gain/loss for 2017. Then just report the 'real' numbers in 2018.

Thanks TaxGuy, Yes the escrow did received the money in 2017, which I will report the sale in 2017

[taxmom34]

the 1099S is for 2017, I would report the sale 2017. the situation you present is the same as if you got a check dated 12/29/17 but you cashed it in January.

[Burke]

Agree. And the settlement statement would have been dated in 2017 as well.