My spouse has a 1099S, proceeds from real estate transactions, from the sale of her deceased fathers home. The amount in box 2 is $28,305. Is this taxable income?

[Texas Roger · Accepted solution]

The amount that is taxable is any gain from the value of the home on the date of death to the sales price. If there was no gain during that time, nothing is taxable. Any selling expenses can be added to the value on the date of death to increase the cost basis. The 1099-S must still be entered on the tax return. Any gain is taxed as a long term capital gain regardless what the holding time was.

[m110]

Hi, I sold my mom's condo this year.  My 1099s from the title company shows 90,000 the sale price in box 2.  I received 83,805.24.  The value of the home on my mom's date of death was 80,000.  Do I add $6194.76 to the value on DOD =86,194.76?  Also, do I enter 90,000 in the NET PROCEEDS box (using Premier) even though I only netted 83,805.24?  Thank you very much!

[Texas Roger]

Yes you add the $6195 to the value on DOD. You enter the $90,000 in the net proceeds box. The result is a long term gain of $3805. The alternative is to enter the net proceeds that you actually received and leave the cost basis of the home at $90,000. The result is the same gain but by leaving the net proceeds at $90,000, you match the 1099-S which the IRS receives.

[m110]

Thank you very much!!!! :0)