1099s Mom passed sold house was on deed

[frankdigiu]

Hi Guys 

I have question ask future tax's I may have to pay with 1099s.   I was on deed with my Mom for couple years . She was 92 passed Nov 8 2023.    Sold the house May 2  this year.   I did share half the sale with my older brother .  House was only under my name after mom pass.  No Will  Mom had .  I took care of her since 1992 Dad passed.  Over last couple years Wife and I took turns living there to take care her. She refuse to leave her home. Refuse anyone outside care too.  We could not  trust her alone . Tries several times for her move into our house  refuse up to last day. 

My question is could I use that exclusion to help lower some gains tax?  I paid all tax on property for last 4 years and helped with all utilities cost ect..   Before sold house replaced costly HVAC and hot water tank . Also upgraded few things help sell house.  I tried running few things with last years Turbotax software to get idea . I been doing my own tax's with small business software for years no problems   68 retired but still work.  I am not sure how to go about all this for next year.  I know I have paid just want know if any this would lower it. Mom and I 3 years ago talked about her adding me to deed to avoid paying more taxs.. Then i hear about 1099S taxs  after shes gone and house sold.  Thank you for any help or ideas.

[M-MTax]

My question is could I use that exclusion to help lower some gains tax? 

Can't use the home sale exclusion because you didn't use your mom's home as your main residence

[M-MTax]

26 CFR § 20.2036-1

Look for a local tax pro because you might be able to take the position that your mom had retained a life estate by implication.

[Hal_Al]

Q. Could I use the home sale exclusion to help lower some gains tax?  

A. No, since it was not your home.

But, you (most likely) don't  really have a taxable capital gain. 

The usual rule, for a gift (when your mother put you on the deed), is that the recipient's basis is the giver's basis (what you mother paid for it). But there is an exception for the gift of her home, where she retained the right to live there ("life estate"). "If your mother gave away an asset and keep a life estate in that asset..... the cost basis of the house is "stepped-up" to the value of the house on date of death [IRC 2036]")

More info: http://www.law.cornell.edu/cfr/text/26/20.2036-1

Since the house sold shortly after her death, there is unlikely to be any capital gain. Considering the expenses of sale, there may even be a capital loss.  If the house was "investment property" (no significant personal use by you or others, after he death), you can deduct the loss.

A life estate does not have to be explicitly established in the deed. Your mother probably had an "implied life estate." If so, that would give you the stepped up basis. There is case law on this.