My brother and I each received proceeds from the sale of our late mother's house. When the house was sold, the proceeds were held by an attorney until the probate process completed, then we were each given checks for half the net proceeds of the sale. The attorney then sent us each a 1099-MISC for the amount received, with the amount in Box 3.
Is the 1099-MISC the correct form and Box 3 the correct box on that form? I ask because that would appear to make the amount 100% taxable (like any other income), when in fact it was the result of an inheritance, which should not be taxable, given that the FMV did not appreciate from the time of her death to the time of the sale.
I would like to know if I have cause to challenge the issuance of the form by the attorney, and any suggested course of action would be greatly appreciated. Thanks in advance!
