Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
Hi All,
I sold my first property which had a mortgage. What is suppose to be reported on the title company's form 1099-S in box 2? Is it the selling price of the property?
Shouldn't it be net price? Selling price - outstanding mortgage principle - selling costs
I just want to avoid paying taxes on the selling price of the property when I actually only received a portion of it minus all the costs and mortgage principle.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
10y
Box 2 is for the gross proceeds (what you sold the house for). That doesn't necessarily mean you pay tax on that entire amount though.
If you're interested, here are the instructions for this box from the IRS website:
"Enter the gross proceeds from the sale or exchange of real estate. Gross proceeds means any cash received or to be received for the real property by or on behalf of the transferor, including the stated principal amount of a note payable to or for the benefit of the transferor and including a note or mortgage paid off at settlement."