1099S For Estate Sale

[dakeans]

My father died a few years ago pennyless and with an underwater mortgage on a decaying house.  There was no will & no estate.   I have never signed any documents acknowledging a right or responsibility to any of the belongings.   I received a 1099s today for a sale in November.  The gross proceeds is listed as $35k.  An attorney is listed as the filer and my name and address are on the transferor section.  

I've received no money regarding a transaction on this home nore have I accepted the property.  Am I liable for taxation on this?  Perhaps off base for this site:  Should be seeking a portion of the proceeds?

[tagteam]

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@dakeans wrote:

I've received no money regarding a transaction on this home nore have I accepted the property.  Am I liable for taxation on this?  Perhaps off base for this site:  Should be seeking a portion of the proceeds?

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Whether you have any federal (or state) income tax liability depends, but you will have to report the amount on the 1099-S (assuming it has your social security number) or there will be a mismatch between your return and the IRS records.

You should definitely contact the attorney who filed the 1099-S and inquire as the disposition of the proceeds as well as any other pertinent information, such as the tax basis and sales price.

[ColeenD3]

This sounds like something about which you should see an attorney. Since the IRS will receive a copy, you can't just ignore the form. If the form says that you received $35,000, then if it were me, I'd wonder where the money was.

[dakeans]

Well, definitely I'm wondering where the money is.   We did not authorize an estate to be opened (DE).   So it seems odd that someone could pass without a will, in debt and essentially their debts would be passed on to kin.   I suppose our first step is to reach out to the attorney on the document, but we've tried to avoid any association with my father's dealings, yet here we are....

[tagteam]

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@dakeans wrote:

I suppose our first step is to reach out to the attorney on the document, but we've tried to avoid any association with my father's dealings, yet here we are....

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You absolutely need to reach out to the attorney who filed the tax reporting statement (1099-S) as that attorney may be holding (or have forwarded) the proceeds that may be due to your father's heirs.

[dakeans]

I suppose I'm wondering how on earth there could of been 'proceeds' since he was well underwater on his mortgage at the time of his passing.

[dakeans]

For the record, my SSN is not on the form.  Only name and address The Transferors ID number section is blank

[tagteam]

There might have been a foreclosure and a subsequent sale (e.g., auction) where the selling price exceeded the balance of the mortgage. 

You can certainly contact an attorney to represent you but, most likely, the first thing that attorney is going to do is reach out to the attorney who filed the 1099-S, which you can do yourself.

[dakeans]

Yeah, the selling price definitely did not exceed the balance of the mortgage.  With $35k on the listed amount, the remaining mortgage balance exceeded $200k.   I'll definitely reach out to the attorney on the form.   

[tagteam]

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@dakeans wrote:

I'll definitely reach out to the attorney on the form.   

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That would be the best idea, but keep an eye out for a possible scam since something does not appear proper about receiving this tax reporting statement.

For example, I would be cautious about giving this attorney my social security number (or other identifying personal information) until the attorney provided me with all of the relevant information regarding this (or any other) transaction.