I received a 1099-S for a house I did not own. I was on the title because I had loaned my son the down payment. The 1099-S gets sent to the IRS. How do I explain?

[GeorgeM777]

Maybe, but there are a few things to consider.  Given that when your mom paid off your mortgage, and removed your name from the property deed, we assume that your mom is now the legal owner of the property.  In other words, her paying off your mortgage was not a gift per se, as it appears she did receive something of value in return, namely she is now the legal owner of the property and you are not.  Because you received the same value (the pay-off of your mortgage) for what you gave up, your home, there is no gain to report.  However, you do need to report the transaction because you did receive a 1099-S reflecting proceeds of $95,000.

Given your factual scenario, when you are ready to report this transaction on your return, reflect the basis and the proceed amount as the same.  As a result, this transaction will not incur any tax liability.   However, there is another consideration here that may impact how you report this transaction.  

If the value of your home was worth more than your mortgage, your mom arguably received a gift from you to the extent the value of the home exceeds the mortgage.  In other words, your mom was able to obtain full ownership in your home for less than what it was worth.  If you are not expecting anything of value in return for what you gave up, then you gave a gift to your mom.  In such circumstance, it is not your mom that has to be concerned with the gift tax, but you.  You might consider checking on the value of your home, or recent similar home sales in the area, to get a better idea as to what your home is worth.  Once you know the value of your home, you will have a much better idea as to whether you gave a gift to your mom, and if so, how much.  

TurboTax does not support Form 709, United State Gift Tax, and thus, if you need to complete such form you will need to download it from the IRS website.  

[dulcedp]

Re:1099-S : My living mom sold her home. my sister and I were on the deed but she kept all the proceeds. my sister and I both received a split of the sale but my Mom didn't receive a 1099-s. How do we fix this so my Mom claims all the proceeds

[ErnieS0]

I’m not fully understanding your question. Did you or your sister receive Form 1099-S because you were on the deed? And why were you on the deed? Are you co-owners?

If you and your sister received “a split of the sale” then you and your sister are responsible for reporting your share of the sale income. Your mom should not report all the proceeds if she did not get all the proceeds.

If the three of you were on the deed then split the sale according to your ownership percentages.

If one person received a Form 1099-S then they would issue Forms 1099-S to the other owners.

See Tax Expert DianeW777’s advice in “Sold co-owned house and only for one 1099-s.”

@dulcedp 

[dulcedp]

We're on the deed because of a life estate. ( She granted the property to myself and my sister for $1 as joint tenants, reserving herself a life estate). Mom wanted to sell the house, so we complied but she received all the proceeds. and I just found out my Mom didn't receive a 1099-S. Can my sister and I issue a 1099-S to my mother?

& thank you! for the quick response

p.s. she signed the purchase agreement and all three of us signed the Deed Sale (Warranty Deed), my Mom signing as "the Grantor".

Dulce

[KrisD15]

In your situation, it would be best to talk with a local real estate attorney.

Real Estate law is governed by the state. 

A "Life Estate" may have just been put into place so that you and your sister would inherit the house without it gong to probate had your mother passed. 

It MAY not mean you or your sisters were owners. 

It MAY not mean you or your sister need to report the sale. 

It MAY mean that your mother gifted you funds and if over the yearly limit (16,000 per person) , your mother may need to file a Gift Tax return. 

She most likely would not owe tax on the gift, but she would need to report it on Form 706. 

Again, you need to speak with a professional familiar with your situation. The attorney that set-up adding you and your sister to the deed would be the best person to speak with.

Gift Tax 

[dulcedp]

Got it...thank you very much for your assistance

Dulce