topic If a life estate exemption is only a percentage for the life tenant, how is this entered in the deluxe software package? in Get your taxes done using TurboTax

If a life estate exemption is only a percentage for the life tenant, how is this entered in the deluxe software package?

miketerrymiter — Mon, 08 Jul 2019 13:14:22 GMT

Re: If a life estate exemption is only a percentage for the life tenant, how is this entered in the deluxe software package?

Critter — Mon, 08 Jul 2019 15:17:40 GMT

A what ??? What are you doing ?? Are you completing the estate form 1041 ?

Re: If a life estate exemption is only a percentage for the life tenant, how is this entered in the deluxe software package?

TomD8 — Mon, 08 Jul 2019 17:03:30 GMT

Assuming the home was sold prior to the death of the life tenant:

If the life tenant lived in the home (or owned the home and lived in a licensed nursing facility) for 2 of the 5 years leading up to the date of sale, he/she is entitled to the capital gains exclusion on their share of the gain. If the exclusion amount exceeds the amount of their capital gain, the sale need not be reported on their tax return, unless he/she received a 1099-S. If the sale must be reported by the life tenant, they would enter their proportional information in the Less Common Income > Sale of Home section of TT.

If the home was sold prior to the life tenant's passing, the cost basis of the home is its original (adjusted) basis. There is no "step-up" in basis.

I live in a home that I gave to my two children a few years back, I pay all the bills and pay the real estate taxes for this house that I live in full time. How do I claim that for the Homestead credit? And do I put down that I am a renter, homeowner ?

MohicanJoe — Thu, 24 Mar 2022 18:01:46 GMT

Please Help

Re: I live in a home that I gave to my two children a few years back, I pay all the bills and pay...

MarilynG1 — Thu, 24 Mar 2022 21:40:41 GMT

If the home is no longer in your name, you would not be considered a Homeowner. However, you could be considered a renter.

There are 'Homestead Credits' offered in several states; can you clarify what state you are in and we'll try to help.

Click this link for more info on the Homestead Credit.