Basis on sale of primary residence?

DH’s sister sold her primary residence for $160,000. She is filing single. Since the sale price is less than the $250,000 capital gains exclusion does she have to report the basis of the home?

Does she have to fill out Form 8949 or Schedule D?

Thanks,
Wendy

DH’s sister sold her primary residence for $160,000. She is filing single. Since the sale price is less than the $250,000 capital gains exclusion does she have to report the basis of the home?

Does she have to fill out Form 8949 or Schedule D?

It depends. She only gets the exclusion if she both owned and lived in the house for at least two of the previous five years. Also, if a 1099-S was issued, she should report the sale on Form 8949 anyway, (taxable gain will be $0), because if the IRS doesn’t see it, she will get a CP2000 notice down the line.

Ira

5 Likes

Laws may have changed but used to be that you claimed the $250k exclusion on Schedule D.

Irs has a publication on the subject with details.