Tax Question - How to Report Real Estate Sale?

[Mark J.]

Just received a notice from the IRS stating "your 2014 tax return doesn't match the information we have on file." There were several small items, but the big one was the sale of my primary residence. Since I owned the home for 10 years, as I understood it, I didn't have to pay taxes on the proceeds so I didn't file any paperwork. (Hey, it was my first house. I didn't know!!) ;)

I plan to file a 1099-S "Proceeds from Real Estate Transactions". So my question is since the form asks for "Gross Proceeds" (i.e. final sales price), do I need to, and if so where, show the net proceeds (gross proceeds minus the existing mortgage). The net amount was less than $250K.

Would it be best to refile or just submit the forms that were missing?

Many thanks in advance!