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elmorejs
New Member

Nominee Adjustment

During the year my brother and I sold our parents home - both of whom have been deceased for 4 years.   After taking the 'step-up' and calculating the new cost basis I now need to make a nominee adjustment to put 1/2 of the net proceeds to him.   How and where do I make this adjustment?

2 Replies
Cynthiad66
Employee Tax Expert

Nominee Adjustment

f you have not received a Form 1099-S from the title company, you may report the sale reflecting only your portion of proceeds and only your portion of expenses; consequentially, you will be taxed only on your portion of the capital gain, if applicable.

If you have received 1099-S reporting your portion, proceed as normal; use steps below for data entry.

If you received 1099-S reporting full amount of gross proceeds and not just your portion: be sure to contact the closing company and request  a corrected 1099-S so that only your portion is reported (if the house was to be "legally" divided)

To enter sale from an inheritance:

  1. Federal Taxes 
  2. Wages & Income
  3. Scroll down to Investment Income
  4. Select Stocks, Mutual Funds, Bonds, Other – indicate that you have not received form 1099-B and continue through the interview. Enter Second Home as type of investment; date of inheritance is typically date of death; Fair Market Value (your portion) of the property on the date the deceased passed away entry is your data entry for the basis. The basis of an inherited property is its Fair Market Value (FMV) on the date of death (unless the executor elects to use values 6 months after the date of death). 

 

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elmorejs
New Member

Nominee Adjustment

Thanks for the information.    That answered my question - fortunately don’t have this question often.

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