hi, Can get help filing my 2023 tax with an 1099-S?

[likua01]

My sisters and I inherited my moms house and was sold to divide among us. I received a 1099-S form and when I input the information it asks when did I purchase the house. My sisters and I received the funds from the sale but I have no clue when it was purchased and how much. It asks alot of questions about the house and I have no idea what to put on the form.

[AnnetteB6]

Here is some general information to know when you have inherited a house.  

First, since it is inherited, you came to possess the house on the date of your mom's death.  That is the day you acquired it.  You would indicate on your return that it is inherited versus purchased.  

Next, the fair market value of the house on the date of death is the amount used to determine whether it was sold at a gain or a loss.  In the case where a house is purchased and sold, this fair market value is the 'purchase price'.  

You need to know whether your Form 1099-S represents only your share of the house proceeds, or if it includes the entire proceeds from the sale.  When you are working on your return you will only be reporting your share of the fair market value and the proceeds.  Just as an example, suppose the fair market value is $100,000 on the date of death and the property was sold for $120,000.  Also suppose that you have 3 sisters, so the property is split 4 ways.  You would report $25,000 as your cost basis (purchase price) and $30,000 as the proceeds from the sale.  This would mean you have a $5000 taxable capital gain.

Questions about the fair market value of the house should be answered by the estate executor.  Generally, an appraisal of the house would be ordered so that the fair market value could be determined.  

When you start entering the information into TurboTax, use the following help article for guidance.  Note - do not select 'second home' for the investment type, select 'other' instead:

Where do I enter the sale of a second home, an inherited home, or land on my 2025 taxes?

[pk]

@likua01 , sorry for your loss.

(a) When a decedent passes , his/her assets , generally get a step-up in value to the then current Fair Market Value ( FMV).  This is mostly done through a valuation or sale  within a shot period post the passing.   There are "ands", "ifs', and "buts" to this.  Also there are state impacts.  What this generally achieves is "no Tax " on inheritance  for most people  ( if the estate is large then of course there is estate taxes involved ).

(b)  For your filing of the 1099-S ( assuming that each of the inheritors  received one  with his/her SSN and share of the proceeds), you  need to tell TurboTax that you acquired the property through inheritance.  It will then walk you through the rest of the filing.  You should end up little  or Nil taxable income out of this.

 AS an example , say the house , at the time of the decedent's   passing was worth  $150,000. And the ownership is to be shared between two siblings.  Thus each of you have a basis in the property of  $75,000  ( for your half of the asset ).   Now, say you wait two years  and sell the house  for $200,000 after  all the commissions/ transfer taxes etc.  This means  that each of you should get a 1099-S for  $100,000.   Your net gain ( proceeds  LESS Basis ) is   100,000 less 75,000 = $25,000.

Does this make sense /   Is there more one of us can do for you ?