TurboTax Bug When Reporting 1099-S on Form 4797 Line 1a for Rental Property Sale

I just discovered what seems to be a bug in TurboTax when reporting the sale of my rental property. The software completely skips asking about any 1099-S during the interview process for the rental sale. While all the gross proceeds and cost basis information appears correctly further down on Form 4797, line 1a (which should show how much came from a 1099-S or 1099-B) is completely blank. My taxes have already been processed and I've received my refund, but I was checking my tax transcript and noticed in the 4797 section it shows $0.00 for 1099-S/1099-B amounts. This is definitely wrong since I received a 1099-S for the sale that was around $285,000. Even though the sale details and calculations appear correct elsewhere on the form, I'm worried that having line 1a blank might trigger something with the IRS. I've seen some people in forums mention this hasn't caused problems for them, but I'm nervous. Has anyone else run into this specific TurboTax bug with Form 4797 line 1a being empty despite having a 1099-S for a rental property sale? Any firsthand experience would be really helpful!

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18 comments

Chloe Martin

•8M

This is actually a known issue with TurboTax that's been around for several years. The software doesn't properly populate Form 4797 line 1a with 1099-S information for rental property sales, even though it correctly calculates the gain/loss further down on the form. The good news is that this omission generally doesn't create problems with the IRS because the actual transaction details and final calculations are still correctly reported on the form. The IRS is primarily concerned that you're properly reporting the sale and calculating the correct tax liability, which it sounds like TurboTax did correctly in your case. Line 1a is primarily an informational line that helps the IRS match third-party reporting with your return. Since the full details of the transaction are included elsewhere on Form 4797, including the property address and sales price, the IRS can still verify everything matches up with the 1099-S they received.

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Chloe Martin

•8M

I haven't seen any official announcement from TurboTax about fixing this specific issue. It's been present for at least the last three tax seasons that I'm aware of, which suggests they either don't consider it high priority or haven't identified it as a problem. If you're concerned, you might want to explore other tax software options like H&R Block or TaxAct, which some users report handle Form 4797 reporting more thoroughly. However, if you're comfortable with TurboTax otherwise and this is your only concern, it likely won't impact your tax situation since the core calculations are still correct.

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Diego Rojas

•8M

After dealing with a similar issue last year, I discovered taxr.ai (https://taxr.ai) which saved me so much headache with my rental property sale! I was worried about the same TurboTax bug where my 1099-S wasn't showing up on line 1a of Form 4797, but I uploaded my documents to taxr.ai and it immediately identified the discrepancy. It doesn't just point out the issues, it actually explains how the forms should be correctly filled out based on official IRS guidelines. The platform analyzed my full tax return and confirmed that even though the line 1a was blank, all the necessary information was included elsewhere on the form, so it wasn't likely to trigger any IRS issues. Really gave me peace of mind about the whole situation.

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Diego Rojas

•8M

It doesn't fill out forms for you - it's more like having a tax expert review what you've already prepared. You upload your completed return and any supporting documents, and it analyzes everything for accuracy and potential issues. It's really helpful for catching things you might have missed. For complex situations like depreciation recapture, that's actually where it shines. It cross-references all the relevant forms and schedules to make sure depreciation was correctly calculated and reported. It even checks if you've properly allocated the gain between Section 1250 recapture, Section 1231 gains, and capital gains. I was impressed with how detailed the analysis was.

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Anastasia Sokolov

•8M

Just wanted to update after trying taxr.ai for my rental property sale reporting! After reading about it here, I decided to give it a shot since I was having the exact same issue with the blank line 1a on Form 4797. I uploaded my draft return and the 1099-S from my property sale, and within minutes got a comprehensive breakdown of my entire return. It actually confirmed that despite the TurboTax bug with line 1a, my return was properly reporting the sale in all the areas that matter for tax calculation. It even explained how the depreciation recapture was being handled correctly on other parts of the form. The peace of mind was totally worth it, especially since I was worried about potential IRS issues. Ended up filing with confidence and got my refund without any problems!

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Sean O'Donnell

•8M

If you're really concerned about potential IRS issues from this TurboTax bug, I'd recommend Claimyr (https://claimyr.com). I was in the same boat last year - noticed the Form 4797 line 1a issue after I'd already filed and was freaking out about getting audited. After multiple failed attempts to reach the IRS (literally spent hours on hold), I tried Claimyr and got connected to an IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent confirmed that as long as the actual sale information and calculations were correct elsewhere on the form, the blank line 1a wasn't going to be an issue. They actually told me they see this specific TurboTax issue quite often. Having that direct confirmation from an IRS agent made all the difference for my peace of mind.

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Sean O'Donnell

•8M

It's not about cutting the line - it's a callback service that does the waiting for you. The system uses automated technology to navigate the IRS phone menu and waits on hold in your place. Once they're about to connect with an agent, you get a call to join the conversation. They don't have any special "inside track" with the IRS - they're just handling the frustrating part where you'd normally be waiting on hold for hours. You still talk directly with official IRS representatives, and they have no idea you used a service to avoid the hold time. It's completely legitimate.

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Luca Esposito

•8M

I need to eat my words about Claimyr. After posting that skeptical comment, I decided to try it myself since I've been trying to reach the IRS for 3 weeks about this exact Form 4797 issue. Honestly, I'm shocked at how well it worked. I requested a callback through their system, and within 45 minutes I was on the phone with an actual IRS representative. I explained the TurboTax bug with Form 4797 line 1a being blank despite having a 1099-S, and the agent immediately knew what I was talking about. He explained that this is a common reporting issue they see with TurboTax returns, and confirmed that as long as the property sale is fully reported with the correct amounts elsewhere on Form 4797, there's no need to file an amended return. The line 1a omission won't trigger any compliance issues as long as the calculations are correct. Saved me from filing an unnecessary amendment and a ton of stress!

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Nia Thompson

•8M

I ran into this exact problem when selling my rental in Phoenix last year. I noticed the 1099-S amount ($342,000) wasn't showing up on line 1a of Form 4797 even though TurboTax calculated everything correctly. I called TurboTax support and they acknowledged the bug but said they didn't have a fix for it. The support rep recommended I print the return, manually write in the 1099-S amount on line 1a, and mail it in instead of e-filing. That seemed like overkill to me, so I just e-filed as is. Never heard anything from the IRS about it, and that was for my 2023 return.

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Nia Thompson

•8M

I didn't file an amended return, and I wouldn't recommend doing so in your case either. An amended return should be used for substantial errors that affect your tax liability, not for missing information that doesn't impact the final calculations. Since the sale details are correctly reported elsewhere on Form 4797 and your tax calculation is accurate, filing an amended return would likely just create unnecessary complexity and potentially delay any refund you're expecting. In my case, the IRS processed my return without any issues despite the blank line 1a.

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