For many years, tax practitioners used the Settlement Statement (HUD-1) to identify the appropriate figures needed to prepare tax returns for individuals purchasing, selling or refinancing real estate. In 2015, the HUD-1 and the final Truth-in-Lending disclosure were combined into a new form, the Closing Disclosure, which details the terms and all of the costs of the real estate transaction.
Just as tax return preparers learned how items entered on the HUD-1 were used for income tax return preparation, they must now become thoroughly familiar with how the entries on the separate Closing Disclosures for buyers, sellers and those refinancing property are used to calculate property basis, gain or loss and currently deductible expenses needed to prepare the individual income tax return.
- Purpose and content of the new Closing Disclosure form
- Tax preparation issues for the buyers, sellers and those refinancing
- Calculation of basis and gain or loss on real estate sales
- Determination of currently deductible expenses related to real estate transactions
- Use the new Closing Disclosure form to prepare income returns for buyers and sellers of real estate
Any tax practitioner with clients who bought, sold or refinanced real estate
General background in individual income tax preparation