Schedule D (Form 1040)

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David1
David1 Member Posts: 3 Newcomer

I need to file a schedule D for the sale of some personal assets that I made during 2023. Where do I find the schedule D form on the FreeTaxUsa website?

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  • Henry
    Henry FreeTaxUSA Agent Posts: 86
    edited April 3
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    Hi David1, keep in mind that if you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry, or silverware, your gain is taxable as a capital gain. On the other hand, the IRS doesn't allow you to claim a loss on the sale of personal items.

    (see Sale of Personal Items on pg 36 of IRS Publication 525)

    If you have a gain to report, you can enter information about the asset sale by using the following menu path:

    Income > Common Income > Stocks or Investments Sold (1099-B)

    You can enter each personal asset sale one at a time. Just answer the questions as they apply to each asset, and Schedule D will be generated based on your entries.

  • David1
    David1 Member Posts: 3 Newcomer
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    Thanks for your response!

  • sraadams2
    sraadams2 Member Posts: 2 Newcomer
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    So does the above apply to generating a Schedule D if you invested in a property to flip, but the sale fail through. Meaning your lost your investment with no income or gain received—how do I generate a Schedule D if it was a lost?

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 247
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    Hello Sraadams2,

    Just because a sale fell through, does not constitute a loss on your tax return. So, no I don't think this applies to your situation. You can still own the property and can sell it. However, when you do sell it, you can include the additional selling costs from the failed sale to your total selling cost to reduce your capital gain.

  • sraadams2
    sraadams2 Member Posts: 2 Newcomer
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    Thanks for your response—but I guess I was not clear. I was looking to make a real estate deal in another state—but the sale didn't go through and I am out $75K can I recoup any of this money on my taxes. I tried legally to contact the person handling the sale in California but to no avail.

    I'm not sure if this counts as earnest money or not. Should I upgrade my tax package with Pro-support?

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 109
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    Hi sraadams2,

    Just to clarify, do you mean you spent $75,000 in a real estate deal that did not go through with the purchase of the property, and you're out the money? Do you have any language in your contract or buyer's agreement that stipulated this was earnest money or a deposit?

    Was this to be a personal residence for you? If so, it's a non-deductible loss as Matthew suggested above.

    Was this going to be an investment for you and therefore considered a capital asset? If a capital asset, forfeiture of a deposit is treated as a capital loss to you. If your intention was to rent it out (as in trade or business/passive income) it would be considered a non-capital asset. If it is a noncapital asset, forfeiture of a deposit is treated as an ordinary expense to you.

    If an investment real estate property, your forfeiture of earnest money or deposit is a capital loss to you, the prospecitve buyer.

    Your individual facts and circumstances matter to determine how you might claim the loss of this money.