Estate sold in 2022, but no 1099-s received

[rbhall52]

My wife and her brother sold their parents' house in 2022 about a year after their mother died, their father having died 5 years before the mother died. I do the taxes for my wife and I but I have not received any 1099-s form, even though I confirmed with the lawyers who did the closing that a 1099-s was filed by them under the ssn of the father. Do I have to do anything relating to the house/estate sale since I did not receive the 1099-s that was filed?

[PattiF · Accepted solution]

The sale of the inherited house should be reported on the tax returns of your wife and her brother if they received the proceeds of the sale. You can request that two corrected 1099-S Forms be issued that show the sale proceeds paid to the children for the house sale. It should have been issued to them instead of a person who was deceased five years ago. If you cannot get the corrected 1099-S, get a copy of the 1099-S and divide the proceeds by two to record the sale on your tax returns. Divide all of the expenses of the sale by two.

The sale of inherited property is considered investment income and there could be a capital gain or capital loss. Make sure that this is entered as inherited property. Since the sale was close to the date of death, the FMV or cost basis can be the sale price. 

Other items can be added to the cost basis such as any necessary expenses to get the house ready for sale and some of the selling expenses.

Generally, these expenses can be deducted as selling expenses:

• Appraisal fees.
• Inspections.
• Loan origination fees.
• Title fees.
• Transfer fees.
• Mortgage interest.
• Mortgage points.
• Real estate property taxes. 

To enter the sale in your return:

Click on Federal > Wages & Income

1. In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.  If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far.  Click on the Add More Sales link. 
2. If you haven't yet entered some investment sales, you will see a screen Did you sell any investments in 2022?  Click the Yes box.
3. On the screen,  OK, what type of investments did you sell? mark the Other box and click Continue.
4. When you get to the screen, Now we’ll walk you through entering your sale details, enter the details of the sale.  You will be able to select the type of investment in the first box (inherited home)  
5. The drop-down boxes can be filled out with the details of the house sale

• Description -address
• Date sold - your records
• Date acquired - date of death
• Sale proceeds 
• Cost basis -FMV at the time of death

We are sorry for your loss.