I received a 1099s on a sale of my aunt's house, My name and my aunt's name was on the deed when we sold her house. She moved to a senior living apartment. We sold the house for 150,000. Since we are both on the deed, I received a 1099s for 75,000 (half of 150,000). My aunt did not receive a 1099s. How do I enter this in Turbotax. Will I have to pay Capital gains tax, since I actually didn't live at my aunt's house.
If this house was not your primary residence for two out of the last five years, you wouldn't be eligible for the home sale exclusion. So, yes, you would be subject to capital gains taxes on the profit from the sale.
Do you have records to show the adjusted basis for the house? You'll need that information to report the sale, including proceeds from Form 1099-S, as half the basis is yours and will reduce the gain on your portion of the sale.
I have records of the sale of the house is that where I get the adjusted basis of the house?
@roger571 wrote:
I have records of the sale of the house is that where I get the adjusted basis of the house?
In the section for selling a home you are asked for the adjusted basis of the home.
Selling cost can include escrow fees, legal fees, real estate agent commissions, advertising costs, and even home staging fees.
If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).
Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)
If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premium edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return.
Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Sale of Home (gain or loss), click the start or update button
Or enter sale of home in the Search box located in the upper right of the program screen. Click on Jump to sale of home
Does all the fees below be considered Selling Costs:
2.981% of Loan Amount (Points)
Processing Fee
Underwriting Fee
Title -Closing Fee
Title - Closing Protection Letter
Title - Courier Fee
Title - Lender's Title Insurance
Title - Title Examination
Real Estate Commission
Reimbursement for Recording of Affidavit of Affixation
Title - Deed Preparation
Points on a loan are not part of closing fees. The rest look like they would be included.
So I am using Turbotax Deluxe Software Version, It asks did you receive a Form 1099-s on the selling price prompt, do I put the total selling price which is 155,000.or 75,000 (which is what is on my 1099-s form).
You enter the actual price the buyer paid for the home, so if that is the selling price that is what you enter.
Do I need to put the 75,000 amount that was on my 1099-s form in any field on Turbotax.
Thank You so much!!
I don't have any paperwork showing how much my aunt paid for home additions (ex: sunroom, garage, porch, windows). Is there a way to count that in the Home Additions for Adjusted Cost Basis.
Yes, it is the sales price for you. Since you sold your half of the house, the 1099-S for $75,000, is entered on your tax return. The date sold and sales price are the easy part. The IRS will match up your 1099-S with your Sch D.
Determining the basis is the more complicated part.
You will add half the selling fees listed above to your basis.
What we don't know is your basis in the house.
For example:
Amy,
She put me on the deed 4 years ago.
No I didn't pay half for the house or any of the improvements.
The only thing I am not sure now, is how to show improvements she made on the house, since she has no receipts to prove it. List of improvements were added a two car garage w/ a concrete slab in front, sunroom, deck, added a concrete porch on the front of the house.
Can I add a roof as improvement that was put on in 2006? I have a receipt for that.
Thank You!!
In your case it looks like the adjusted basis that you have for the house is half of what your aunt originally paid for the house and half of that roof from 2006. Since you don't have receipts for any of the other improvements you can't include them.
The good news is that the gain on the sale of your aunt's house is taxed as long-term capital gains so it is taxed at a lower tax rate. You'll still get to keep most of the money.
In the TurboTax Software, it asks the question Date Bought or Acquired? Do I put the date my aunt originally purchased the house in 1999 or do I put the date when I was put on the deed with my aunt in 2021?
Thank You!!
Yes, you put the date your aunt originally purchased the house in 1999. For gifted property, the holding period includes the holding periods of both the donor and donee.
Can I add buying driveway sealer and supplies as home improvement on my aunts house.
Thank You
No. That would be a maintenance cost. Maintenance costs are not home improvements that are added to the cost basis. A new driveway would be considered a home improvement.
Do I include the Land value to the Purchase Price of the house when it was acquired?
@roger571 wrote:
Do I include the Land value to the Purchase Price of the house when it was acquired?
The purchase price of the home when it was initially acquired should have include the land the home was constructed on. There is no separate land value on a home purchase, unless you are classifying the home purchase as a rental property to depreciate the building only.
The modular home that was put on the land was already purchased by my aunt, the original house that was there had to be torn down and was replaced with the modular home in 1999. Does that make a difference from the question before?
The value of the land is included in calculating basis regardless of whether there is a building on it. It could make a difference to the basis calculation if, for example, the property was worth less at the time you received the half interest than it was at the time your aunt purchased it because the modular home was worth less than the home that stood on the property when she purchased it.
The calculation of basis of gifted property depends in part on whether the property was worth more or less at the time you received it than it was at the time it was purchased.
See IRS Publication 551 for more information about calculating the basis of an asset. There is a section on property received as a gift.
To figure the basis of property you receive as a gift, you must know:
Your original basis in property is adjusted (increased or decreased) by certain events.
If you make improvements to the property, increase your basis.
If you take deductions for depreciation or casualty losses, reduce your basis.
If the FMV of the property is equal to or greater than the donor's adjusted basis, which is typically the case with real property, your basis is the donor's adjusted basis at the time you received the gift. In this situation, it would be what the donor paid for it . Increase your basis by all or part of any gift tax paid, depending on the date of the gift.
Example.
In 2022, you received a gift of property from your mother that had an FMV of $50,000. Her adjusted basis was $20,000. The amount of the gift for gift tax purposes was $34,000 ($50,000 minus the $16,000 annual exclusion). She paid a gift tax of $6,880. Your basis, $26,054, is figured as follows:
Fair market value $50,000
Minus: Adjusted basis 20,000
Net increase in value $30,000
Gift tax paid $6,880
Multiplied by ($30,000 ÷ $34,000) 0.88
Gift tax due to net increase in value $6,054
Adjusted basis of property to your mother 20,000
Your basis in the property $26,054
See also this TurboTax tips article about tracking your cost basis.