Question

I sold my main home and received a 1099S, however, over half of the proceeds was to payoff the mortgage. When I entered the 1099S, it comes up as a gain of $499,000

Forum|Forum|1 year ago
March 8, 2025
1 reply
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I would like to know what do i need to do to indicate that under $250,000 was the remaining balance after mortgage was paid off

M

Mike9241

mortgages do not enter into the computation of gain or loss.

gain = sales price less the total of selling expenses (they do not include prorations like real estate taxes, insurance, HOA fees) and less your tax basis

tax basis is the purchase price plus closing costs plus the costs of improvements.

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D

DayDeCZAuthor

One of the documents received from our lawyer lists seller's expense. That document list mortgage payoff, legal and preparation fees and others. I used that amount and the original purchase price plus closing cost.

Does that sound right?