@Opus 17 wrote:
Since the questioner does not know why the 1099-S only listed half the sale, I think it's a reasonable assumption that the wife inherited her husband's half of the home.
We still don't know how the settlement agent handled the transaction nor how title was being held at the time the sale was closed.
If the parties held title as JTWROS or TBE, then a death certificate should have been sufficient to include the entire proceeds on the mother's 1099-S. Regardless, in that situation, the mother would have acquired the husband's share by operation of law, not "inheritance".
If title were being held by the parties as TIC, then the result outlined here could obtain (for a few reasons) and further, the settlement agent could simply have errored in splitting the proceeds in half in that scenario.
ALSO NOTE: Since the sales proceeds were $225,000, the settlement agent would not even be required to issue a 1099-S provided there was assurance that the house was the principal residence of the seller and the gain would be excludable under Section 121.
