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Get your taxes done using TurboTax
The basis of property inherited from a decedent is generally one of the following:
- The fair market value (FMV) of the property on the date of the decedent's death. or
- The FMV of the property on the alternate valuation date if the executor of the estate chooses to use alternate valuation. See the Instructions for Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.
If the date you received the inherited home is close to the date you sold the home, you may not have a gain so when you report the 1099-S, it won't have an effect on your income tax return.
However, if the property was rented or sold much later, versus when you inherited the home, you may have a taxable gain, if the basis increased. In this case, I would request a corrected Form 1099-S for your share of the inherited home, from the person responsible for closing the transaction. They should have filed a separate Form 1099-S for each sibling.
If you can't get corrected 1099-S forms, since you received Form 1099-S for amounts that actually belong to other people, you are considered a nominee recipient.
You should file a Form 1099-S with the IRS (the same type of Form 1099-S you received) for each sibling. File the new Form 1099-S with Form 1096 (this is a transmittal for the 1099-S) by mailing to the Internal Revenue Service Center for your area.
- On the new Form 1099-S, list yourself as the payer and your as the recipient.
- On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Form 1099-S to show the amount that the recipient has to file on their tax return.
- The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: Click here to order forms or publications from the IRS.
Additional information: Where do I enter the sale of a second home, an inherited home, or land on my 2022 taxes?
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