topic Does my mother need to file a tax return if she sold her home, which was part of a Life Estate, but had total income less than IRS threshold for filing a return. in Deductions & credits

Does my mother need to file a tax return if she sold her home, which was part of a Life Estate, but had total income less than IRS threshold for filing a return.

CraigW53 — Wed, 05 Jun 2019 23:34:31 GMT

If she did not receive a Form 1099-S, she does not need t...

DDollar — Wed, 05 Jun 2019 23:34:32 GMT

If she did not receive a Form 1099-S, she does not need to file a return. If your mother (not an estate) did receive a Form 1099-S, she will need to file.

TurboTaxDavidD, thanks very much.

CraigW53 — Wed, 05 Jun 2019 23:34:34 GMT

TurboTaxDavidD, thanks very much.

Your welcome. Thank for using TurboTax!

DDollar — Wed, 05 Jun 2019 23:34:35 GMT

Your welcome. Thank for using TurboTax!

Re: If she did not receive a Form 1099-S, she does not need t...

dmsgy4 — Fri, 07 Feb 2020 22:32:22 GMT

I have a follow up question for clarification. When I sold the townhouse of my late mother in October 2019, in the closing documents, I found Substitute Form 1099 S. Proceeds of the sale went into my mothers estate (Estate of XXXXXX). I am the PR of the Estate. Do I still need to file and pay taxes on the proceeds ($325K) even though it was well below the $11,500,000.00 threshold? Any help would be appreciated. Thanks!

Re: TurboTaxDavidD, thanks very much.

KrisD15 — Sat, 08 Feb 2020 21:38:58 GMT

The 1099-S should be reported on the estate's tax return.

Additionally:

"you should know the estate's basis in the property is the fair market value of the home on the date of death. If the home was sold relatively soon after death, usually there is no gain on the sale, and often a loss due to sales costs."

Reference

Re: TurboTaxDavidD, thanks very much.

dmsgyfam — Sun, 09 Feb 2020 23:00:11 GMT

So to clarify and expand. My deceased mother's estate (with her own EIN ) received the substitute 1099-S form at closing. Does the estate still need to file a tax return? This is very confusing.

Re: TurboTaxDavidD, thanks very much.

DavidD66 — Mon, 10 Feb 2020 00:10:22 GMT

Whether or not the estate has to report the transaction has nothing to do with the Estate Tax Credit (the $11,500,000 threshold). What's at question is did your mother, or her estate have a capital gain upon the sale of the house. If it was part of an estate, the estate needs to report it. The basis would be the value on the date of your mother's death, so unless there was some very quick appreciation, there would be no gain.