Hi Zoody33/Jeff,
Very sorry about your mother's passing.
I cannot comment if Life Estate receives a step-up basis when one of the owner passes.
A taxpayer does not report purchase of a home. The price paid plus additional fees are considered cost basis of the home acquired to calculate future capital gain/loss upon sale.
Assume there are total four siblings with each inherited 25% of the home. Your 25% allocated cost basis from the Life Estate, plus the money you paid to other three siblings for the remaining 75% is the cost basis of this home. You just keep good records, for example, documenting your 25% allocated cost basis, and payment made to your siblings. Nothing to enter on Turbotax on the purchase, unless you claim property tax deduction or turn it into a rental real estate.
On the flip side, your siblings would need to report the sale of their interest on the inherited home. Each has allocated cost basis from the Life Estate, sale proceed is the money you paid. Depending if the inheritance time to the time of sale is more or less than one year, there should be long term or short term capital gain/loss reported on their 2022 tax returns.
Hope the above helps.
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