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DELETE: This is a duplicated question

I received 50% of the proceeds from the sale of my mom's home after she died. I'm a little confused because the gross proceeds listed on the Substitute 1099-S Form I received are much more than the actual cash I received from the title company. I'm not a homeowner, so this is my first time dealing with any sort of real estate transactions on my taxes. Should I just use the gross proceeds amount when I file my taxes, or am I able to deduct any of the settlement charges?

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Employee Tax Expert

DELETE: This is a duplicated question

You can add 1/2 of the settlement costs to 1/2 of the basis of the house that was sold. I assume the 1099-S are you portion of 1/2 of the proceeds. i will give a quick example.

  1. Say the house sold for $200,000 and you received $100,000 for your 1/2 of the proceeds. 
  2. The basis on an inherited house is generally the Fair Market Value (FMV) of the house on the death of the decedent  unless there was an alternate valuation date.stipulated by the executor of the estate. This happens rarely.
  3. So, in your case, if the fair market value of the house is $200,000, $100,000 would be assigned to you and $100,000 to the other heir.
  4. Settlement costs are not deductible at closing but as I mentioned above, you probably do not have a taxable gain because the Fair Market Value of the house is probably  close to the proceeds you made from the sale.
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Employee Tax Expert

DELETE: This is a duplicated question

You can add 1/2 of the settlement costs to 1/2 of the basis of the house that was sold. I assume the 1099-S are you portion of 1/2 of the proceeds. i will give a quick example.

  1. Say the house sold for $200,000 and you received $100,000 for your 1/2 of the proceeds. 
  2. The basis on an inherited house is generally the Fair Market Value (FMV) of the house on the death of the decedent  unless there was an alternate valuation date.stipulated by the executor of the estate. This happens rarely.
  3. So, in your case, if the fair market value of the house is $200,000, $100,000 would be assigned to you and $100,000 to the other heir.
  4. Settlement costs are not deductible at closing but as I mentioned above, you probably do not have a taxable gain because the Fair Market Value of the house is probably  close to the proceeds you made from the sale.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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