1099-S multi transforer gross proceeds

Forum|Forum|3 years ago
August 21, 2022
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1099 S indicates the gross proceeds of the sale of a gifted property (supposed to be inherited) although the percentage of the proceeds was only 45%. How do I report that? thanks

Best answer by pk_

Awesome.. Thanks much for the info..

@Member_Nine12 , just to clarify a little of what @Anonymous_ is saying with an example:

(a) Husband and wife owned a house which they had bought for 100,000. They ;live in a non-community prop state

(b) Husband passed , left the house to the wife, and on the day of his demise the house has an FMV of 200,000

(d)Now wife decides to co-own the prop with her two children on a 10, 45,45 basis and in a revocable trust.

(e) five years later she decided to sell ( the children agree to this )

(f) With no improvements etc. the basis split between the parties is as follows -- mother -- 15,000, the two children each with 67,500.

(g)If the property netted 300,000 after allowable expenses, the gains would mother -- 30,000 less 15,000 = 15,000; each of the children 135,000 less 67,500 = 67,500 and will be taxed on this gain.

Does this make sense ?

@Anonymous_

Anonymous_

Level 15

You will have to provide more details and, most likely, contact the party responsible for issuing the 1099-S.

Neither a gift nor an inheritance constitutes a "sale".

Member_Nine12Author

Level 2

Hello,

Thanks for the response. So in 2017 during estate planning, property was deeded "tenants in common" with mother (living trust), brother and daughter with the intent the property could be used after mother's passing. Fast forward, the property was just sold with mother still alive. At closing, brother and daughter received 45% of gross proceeds and mother received 10%. Although, the closing attorney indicated the total amount of gross proceeds on each 1099S, mother, brother and daughter. It seems the capital gains will be 15% but of what? Each pays 15% of the gross per their 1099S (effectively paying 45% of the gross to the IRS) OR pay 15% of the proceeds each received? 10%, 45% and 45%? I do realize "cost basis" will also factor but left it out to simplify the question.. any info will be greatly appreciated.. thanks