The 1099-S can be issued for several different types of sales or exchanges. Lacerte doesn't have a single entry location for the 1099-S, but there are common entry locations based on the type of sale or exchange reported.
Reporting 1099-S information on a sale or exchange
A sale or exchange includes any transaction properly treated as a sale or exchange for federal income tax purposes, even if the transaction isn't currently taxable. The most common disposition scenarios are:
- If the 1099-S was for the sale of a primary home see: Reporting a sale of home on an individual return
- If the 1099-S is for assets that were being depreciated see: Entering a sale or disposition of assets
- If the 1099-S is for items that was part of an installment sale see: Generating Form 6252 for a Current Year Installment Sale
- If the 1099-S was for items that were part of a Like Kind Exchange see: How do I enter a Like Kind Exchange (Section 1031) using the Exchange Wizard in Lacerte, if box 4 is checked
- For timber/lumber sales reported on Form 1099-S these may be reported as:
- Schedule D dispositions or
- Ordinary income for a business
- See IRS Pub. 225 for help determinizing the correct reporting requirements.
If the real estate is entered on the Depreciation screen and the method selected is 70, 71, 80, 81, 82, 83, 85, 87, or 89 (real estate), Lacerte assumes the asset is a Form 1099-S transaction and automatically reports the gross proceeds from the sale on Form 4797, line 1. Lacerte assumes all other methods to be non-real estate assets whose gross proceeds aren't reported on Form 4797, line 1.
Follow these steps to override Lacerte's assumption:
- Go to Screen 22, Depreciation.
- Scroll down to the Sale of Asset (4797/6252) section.
- Enter a '1' or '2' in Form 1099-S transaction: 1= no, 2= yes [O].
What information does the 1099-S show:
- Box 2 - Shows the gross proceeds from a real estate transaction - generally, the sales price. Gross proceeds include cash and notes payable to the transferor, notes assumed by the transferee (buyer), and any notes paid off at settlement.
- Box 2 doesn't include the value of other property or services the transferor received or will receive. See Box 4.
- Box 3 - Shows the address or legal description of the transferred property.
- Box 4 - If marked, shows the transferor received or will receive services or property (other than cash or notes) as part of the consideration for the transferred property. The value of any services or property (other than cash or notes) isn't included in box 2.
- Box 6 - Shows certain real estate taxes on a residence charged to the buyer at settlement. See instructions for Schedule A, line 5b.
- If the transferor has already paid the real estate tax for the period that includes the sale date, subtract the amount in box 6 from the amount already paid to determine the transferor's deductible real estate tax.
- However, if the transferor has already deducted the real estate tax in a prior year, generally report this amount as income on the "Other income" line of the appropriate income tax form.
