My parents added my sister and me to the title/deed to their home that they subsequently rented out. I am a co-signer on the mortgage. My father passed away in 2019 and my mother sold the rental property in 2020.
My sister and I each received 25% of the proceeds from the sale (less mortgage pay off).
For my taxes, how do I account for the receipt of these proceeds? My parents claimed the rental income/schedule E on their taxes. I never claimed anything. Do I add it under "Stocks, MFs, Bonds, Other"?
If so, what do I claim as the sale proceeds and cost basis? Just my portion? Since it was a rental house, do I have to account for depreciation that they've taken in their schedule E as part of the basis?
I see that there is a check box for "some (or all) of the proceeds from this dale do not belong to me." Reading that, I should file the sale as in it's entirety and check that box and deduct 75% of the proceeds, I'm assuming?
Am I better off logging this as inheritance instead of 25% real estate sale? I'm not sure how to do that though. I live in WA state so at least we don't have state income tax.
Any help is greatly appreciated.
