Capital Gain Sale of Inherited Home

[smdlarsen]

My husband sold an inherited home he owns jointly with 2 siblings in 2022.  They received a portion of the proceeds and had owner financing for the rest.  I will include the interest income and a capital gain for the proceeds received in 2022.   For the capital gain I reported the 2022 proceeds and an equivalent percentage of the cost (DOD) basis.  I then entered the portion attributable to his siblings. 

Is this correct?  Do I need to enter the full proceeds and the 2022 percent received anywhere?  Or is this enough and report for 2022, with the remaining proceeds reported in the year received?  

[NCperson]

@smdlarsen what value are you using for the cost basis? should be the market value on the date when whomever owned the home passed away

[Mike9241]

there would be a further complication if the property was converted or used as a rental after passing to the heirs.  further an installment sale, where proceeds are received in more than one tax year, needs to be reported on form 6252. There is the option to forgo the installment sale reporting, the entire gain is recognized in the year of sale, so that only the interest income needs to be reported each year. 

also was a 1099-S issued and if so in whose name/SSN   

do the siblings know they have to report their share?

as mentioned by @NCperson the basis is FMV at date of death and depreciation recapture if applicable. 

[smdlarsen]

Yes, I am using date of death valuation.  Thanks

[smdlarsen]

Thanks, very helpful.  The home was never converted or rented; no 1099 was issued; and the siblings are aware of the tax implications.  I'm using DOD valuation for the cost basis and there's no depreciation to recapture.  The only complication was that the proceeds were received in two tax years.  

I appreciation your quick response.  

[smdlarsen]

I have a follow up question.  I went ahead and filled out Form 6252 for installment sales; however, on this form I only entered my husband's portion of the proceeds.  I didn't see that I could both recognize that the sale was of jointly owned property and that the proceeds will be received in installments.  Am I missing something?  Is there a way to recognize both?

Thanks in advance for any insights.

smdlarsen