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Old 12-29-2009, 05:02 PM
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Sale of a non principal residence

I have gross proceeds on sale of house of $50,000.
Expenses on sale of house (commissions, closing cost, etc) of $5,000. Fair market value at time of sale $55,000. This home was inherited and not a principal residence.
On schedule D do I add the expenses of selling to the fair market value and enter that in box e) cost or other basis or subtract the expenses from the gross proceeds (gross proceeds appear on the 1099-s) and put that net number in box (d ) sales price . Since I will be efiling, if I use the net proceeds in box (d) it will not match what the IRS show on the 1099 submitted to them from the title company.



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Old 12-29-2009, 09:50 PM
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You may not be liable for any TAXES! The reason is that the cost basis of the inherited property would be equal to the FMV of the property (that was inherited to you) at the date of transfer of the house!

Thus, the adjusted sale price would be

Sale Price ...............$55,000
Less:Commission.......<$5,000.>
Less: Cost Basis of the house (FMV at date of transfer)
=...... ...................Recognized Gain

In other words, your true capital gains may be considerably less than what you are assuming. I strongly suggest that you consult your local CPA to ensure that you have captured the correct cost basis which would ensure that you pay the least possible taxes resulting from the capital gain on the sale of the home!

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Old 12-30-2009, 06:47 AM
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"I didn't ask my question the right way. What I am concerned about is matching the gross proceeds figure of $50,000 that the IRS will receive on the 1099 from the title company with a like figure on my tax return schedule D.The Proceeds less expenses will be $45,000 (commission, etc.). which I would put in box (d) sales price. The IRS will be looking for $50,000 in box (d). Won't this cause a problem?"



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