excluding capital gain on residence

As long as the entire gain is exempt, you report nothing, even if you get a 1099. See the 1040 instructions.

-- Phil Marti Clarksburg, MD

Just don't report it. The broker should not send you a

If the gross sale price is over $500,000 you will likely receive a 1099S from the settlement agent and you should report the sale on Schedule D. Add another line to claim the exclusion. If the gain is less than the exclusion amount, there is no requirement to report the sale anywhere.

"kastnna" wrote

You don't need to include it anywhere on Schedule D if all the gain is excluded.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

snipped-for-privacy@auburnalum.org (kastnna) posted:

Yes.

If you sell your main residence at a price less than $500,000 - if MFJ ($250,000 Single) - _above_ your cost basis, then you simply do not report anything. The gain is ignored, and no documentation is required. However, if your total sales price could theoretically expose you to the tax (substantially above $500K MFJ / $250K Single), then you would be wise to preserve your cost and other records used to calculate the gain for at least three years. Bill

Provided that you qualify to exclude all of the gain from the sale, you simply do not report the sale; however, if you have any depreciation or amortization recapture, or if you must or choose to report some of the gain, then those amounts must be reported on your return. For more info, see IRS Pub. 523, available online at:

It depends...

If there is no 1099S issued then it does not need to be reported. If a 1099S IS SENT then you need to report the amount on Schedule D. In general a 1099 will not be sent if the sales price is less than $500K or $250K.

This is contrary to IRS instructions, which say no reporting if the entire gain is excludable, even if you get a 1099-S. See the "what goes where" section of the 1040 instructions. This has been in place for almost 10 years and doesn't seem to be creating a problem during underreporter analysis.

-- Phil Marti Clarksburg, MD