Great, you have successfully sold a house at the best price! But it is not yet ended. You have taxed pending.

I know you are searching sources to find the legal tax documents you need to cover after selling a house.

Here we have come up with the list of needed tax documents a seller needs to file after they sold a house. We have talked to legal people and created this checklist so you can fully trust it.

The below list was prepared according to the law attorney’s suggestions and guidelines. 

Let’s find out the home sale-related documents you need in tax time.

7 Sale Documents You’ll Need If You Sold a House

Here we will explain what documents you need, what you don’t need, how to get the needed documents, where to get them, etc.

1.) Form 1099-S

In general federal law, the lenders or your realtor to file Form 1099-S that proceeds with real estate transactions and IRS while selling a house except you meet requirements of IRS for removing capital gains tax.

If you are qualified for capital gains tax exclusions, you don’t need to pay taxes for your home. Otherwise, the sale of your home will be reported to IRS applying the Form 1099-S.

Contact your tax assistant to check if you meet the standard of IRS to exclude the taxes.

The settlement company will issue the tax nit the IRS. If you did not receive anything, you did not have to file a form. Still, there are no taxes for you, you might have to report the sale of the home on your tax forms.

If you are not clear whether you want to file a 1099-S form, contact a real estate lawyer or agent.

2.) 1098 Form

It is a mortgage interest statement form to account for mortgage interest money paid to the lender on the house loan in the previous year. You will still get a 1098 form in the year where you sold a house for mortgage interest paid for the specific year where the loan was active.

3.) House closing statement

It is a legal receipt you get when you close a sale of your house. It included the costs spend during the home sale. 

It contains all the necessary tax information like application of tax, broker cost, and so on.

4.) Cost records

It is the statements or receipts that help to determine the cost basis. It is proof of your costs basis.

According to IRS, the adjusted base is the cost of buying your house plus the cost of initial improvements you spend minus loss amounts, tax credits, and remaining decreases like depreciation.

With the basics, you can determine, depreciation, casualty losses, amortization, and even more.

In simple words,

Basis= Purchase price + costs of purchase + cost of improvements

5.) Documents to report if you are moving for a work

The great news is you might qualify for capital gains tax exclusion if you move to a new home due to work.

For this, you have to meet the below conditions.

  1. Your new job should be at least 50 miles far from your home than your old job.
  2. There was no old job, you just got a job that is 50 miles away from your home.

You can get tax exclusion if either of the above conditions should meet for you or your spouse, or co-owner of the house.

6.) Documents that account home was the primary residence of the owner

If you have the right documents to prove that your house was your primary residence, you can qualify for Section 121 capital gains tax exemption. Remember that, the house should be your primary residence for a minimum two of five years before the date of the home sale.

The documents you may need to prove these two are,

  • Home utility bills
  • Bank statements
  • Voter registration
  • Tax forms

7.) Documents, records, and receipts from the home sale

Saving all the documents, billing receipts, and records from a home sale is beneficial. The original settlement on sale, improvement expenses records, and the final settlement statement on sale.

Always save all of these. We can’t predict when IRS will update its rules and norms. So, keep the records with you.