Fully excludable home sale

[Glenda]

The sale of our home will be exempt from capital gains under the 2 out of 5 year use and ownership rules, however after speaking to the Closing agent (Title Company), she informed me that she will file form 1099-S-- as her standard practice, and she didn't seem to be familiar with the 1099-S exemption certification form. From what I've read online, I thought that as long as we complete and submit IRS FORM 1099-S CERTIFICATION EXEMPTION FORM-- (one for each myself and my spouse)-- there would be no 1099-S issued. Has anyone ever ran into this before with a closing agent?

 

[kirby]

First, closing agent sounds brain dead and there is nothing you can do to fix that. So let it be. Second, it doesn't ultimately matter since you can exclude the gain.

 

[Glenda]

Thank you,Kirby! I guess I'm going to just have to accept it and let her do it her way... I may try printing out some of the IRS info on this and take it to her... I'd really prefer to not have to report the sale.. more paperwork for my tax girl. Plus, I am always worried about doing anything that may make the IRS look at my taxes with more scrutiny. I always follow the tax law, but I would not want to be audited..

 

[Gerald]

If you receive the 1099-S, report it on form 8949. Report the total amount that shows up in the appropriate spot. There is a spot to enter the basis, a spot to enter the gain and a spot to enter the amount of gain to exclude. One of the columns is for the code you use to explain the reason for exclusion - I think its actually "H" as in home.

 

[The Finance Writer]

Use Code "H" in column (f) on Form 8949 to show the exclusion from tax of the amount reported on the 1099-S, which you report in column (d).