Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
arnauds
New Member

1099 S? received 1099 S from sale of inherited property - $57,720 but paid a $6,000 debt back to the estate realizing a net of $51,720 from the sale. How do I report?

1099 S? I received 1099 S from sale of inherited property for $57,720 but paid a daughter's $6,000 debt back to the estate, relative the the sale of the property, realizing a net of $51,720 from the sale. How do I report?

1 Best answer

Accepted Solutions
DianeW
Expert Alumni

1099 S? received 1099 S from sale of inherited property - $57,720 but paid a $6,000 debt back to the estate realizing a net of $51,720 from the sale. How do I report?

The value of the inherited property on the date of death would be your cost basis for tax purposes, which means you should be close to a zero gain or loss on the sale.  

It is not necessary to account for the $6,000 debt payment to the estate, unless this was a written agreement or documentation, making you liable for the debt repayment.  If so, this may result in an overall loss that reduces other income on the tax return.

This inherited property would be considered investment property and will be reported on a Schedule D.

Inherited property usually has a stepped up basis which means the basis would be the value on the date of death, as long as there were no transactions prior to death where the property was transferred into any of the beneficiaries names by gift or sale.  You would use your share of the basis as your cost when entering the sale.

In TurboTax (online or desktop) use these steps after you sign into your account.

  • Federal Taxes Tab
  • Wages & Income
  • Scroll to Investment Income
  • Show more
  • Stocks, mutual funds, bonds, other
  • Follow the prompts
  • Type of investment would be "everything else"
  • Description
  • Select Inheritance (important - it's always considered held long term which provides a special tax break)
  • Click the images attached to enlarge and view.

View solution in original post

1 Reply
DianeW
Expert Alumni

1099 S? received 1099 S from sale of inherited property - $57,720 but paid a $6,000 debt back to the estate realizing a net of $51,720 from the sale. How do I report?

The value of the inherited property on the date of death would be your cost basis for tax purposes, which means you should be close to a zero gain or loss on the sale.  

It is not necessary to account for the $6,000 debt payment to the estate, unless this was a written agreement or documentation, making you liable for the debt repayment.  If so, this may result in an overall loss that reduces other income on the tax return.

This inherited property would be considered investment property and will be reported on a Schedule D.

Inherited property usually has a stepped up basis which means the basis would be the value on the date of death, as long as there were no transactions prior to death where the property was transferred into any of the beneficiaries names by gift or sale.  You would use your share of the basis as your cost when entering the sale.

In TurboTax (online or desktop) use these steps after you sign into your account.

  • Federal Taxes Tab
  • Wages & Income
  • Scroll to Investment Income
  • Show more
  • Stocks, mutual funds, bonds, other
  • Follow the prompts
  • Type of investment would be "everything else"
  • Description
  • Select Inheritance (important - it's always considered held long term which provides a special tax break)
  • Click the images attached to enlarge and view.

View solution in original post

Dynamic AdsDynamic Ads
Privacy Settings
v