J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

29.5 Figuring Gain or Loss

To figure the gain or loss on the sale of your principal residence, you must determine the selling price, the amount realized, and the adjusted basis. Worksheet 29-3 may be used to figure gain or loss on the sale of a principal residence.

- - - - - - - - - -

Filing Tip

Form 1099-S

If you received Form 1099-S, Box 2 should show the gross proceeds from the sale of your home. However, Box 2 does not include the fair market value of any property other than cash or notes, or any services you received or will receive. For these, Box 4 will be checked. If the sales price of your home does not exceed $250,000 or $500,000 (if filing jointly) and you certify to the person responsible for closing the sale that your entire gain is excludable from your gross income, that person does not have to report the sale on Form 1099-S, but may choose to do so.

- - - - - - - - - -

Gain or loss.

The difference between the amount realized and adjusted basis is your gain or loss. If the amount realized exceeds the adjusted basis, the difference is a gain that may be excluded (29.1). If amount realized is less than adjusted basis, the difference is a loss. A loss on the sale of your main home may not be deducted (29.8).

Foreclosure or repossession.

If your home was foreclosed on or repossessed, you have a sale. See Chapter 31.

Selling price.

This is the total amount received ...