We recently sold a house that was part of an inheritance. Due to an error by the county or probate court, the deed of the house only showed our name, but not the name of our sister. At closing the title company issued the payment in our name only (not on our sister). We would like to distribute the amount that corresponds to my sister. Questions:
- Title company says that they will issue a 1099 only in our name. The house has appreciated in value since the it was inherited, so we are expecting to pay capital gain taxes. However, we plan to distribute the money to my sister. What is the process we need to follow such that we do not pay capital gain on the entire amount, but only on the amount we will keep?
- Is there a document that I need to draft to show that we paid the portion of the proceeds to my sister? Is there a form I need to submit to IRS or another document I should have my sister sign?
Thank you for your help,
