I was gifted a home by a quit claim from my step father in October. No money was involved. I registered the title in my name. The property was sold in November to a cash buying company at 60% FMV. The title company issued a 1099S with gross proceeds as $390,000. The proceeds were divided with my sister and myself. How do I enter this into Turbo Tax.
I assume that your step-father is still alive or there was no life-estate involved. You enter into TurboTax the $390,000 as the proceeds from the sale of investment property. Your cost basis and holding period are the giver's cost basis and holding period. The amount of taxable income to you is $390,000 minus this cost basis and is long-term if your step-father purchased the property more than a year ago, otherwise it's short-term.
Separately you have made a gift of cash to your sister. Nothing about this gift goes on your individual tax return. If the amount of this gift was more than the annual gift exclusion amount ($17,000 for 2023), you must report this gift on Form 709.
FMV is not relevant if it's more than the donor's basis. You need to find this out as well as when they acquired the property. if FMV is more thn donor's basis your gain is the difference between sales price less selling costs and his basis. His ownership priod is added to yours for determing short vs long-term capirtal gain. since you were the only one on the title when the property wa transferred and then sold, I think the IRS would argue 100% of the gain is yours. Consult a pro if there's a gain and you want to split it with your sister to see if this is possible. I don't think that a loss would be deductible since your holding period was so short. Again you may want to confer with a pro.
your step-father needs to file a gift tax return
you may need to file a gift tax retunr for the proceeds you're gifting to your sister