Since the house was sold while your mother still lives, the value of the proceeds would be divided between the life tenant (your Mom) and the remainderman (you and your brother) according to IRS actuarial tables.
You and your brother are not eligible for a capital gains tax exclusion on your portion unless you met the IRS requirements for the exclusion, which include having lived in the home as your primary residence for two of the past five years. Your mother would qualify for the capital gains exclusion up to $250,000 if she owned the home at least 5 years and lived in it for at least 2 of those 5 years.
Even though you did not receive any of the proceeds from the sale the 1099-S form still needs to be reported on your tax return.
You may want to consult a tax preparer that is well versed in this type of situation so that you prepare your returns accurately.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
