Brother and I received my mother's house via a Transfer on Death Deed

[Jodiesfam]

My brother and I received my mother's house after she died via a transfer on death deed. I am assuming that this is considered inherited. We sold it 7 months after her death and we each received a 1099-S for our half. I have several questions.

1. In starting my taxes, when I got to the investments section of income, where I believe is where I report the sale, it only refers to a 1099-B. I looked for help and it says to answer No when asked if we have a 1099-B, but that question never is asked.  Should I just answer the questions?  I have Turbo Premier for 2023 taxes.

2. When it asks for the gross proceeds, do I list only my half or the total sale because it then asks for the FMV. If I only list my share of the gross proceeds, do I then only list half of the FMV?

3.  I assume when I get to the section about the costs associated with the sale, from the HUD form, that all of that is half as well, would that be correct?

Thanks

[KrisD15]

Speak with a local Real estate Attorney. Real Estate law is governed by the State. 

NORMALLY obtaining a house through a "Life Estate" or death deed is the same as inheriting the home. 

If that is the case, you would only claim a gain if the property increased in value from the date of death until it was sold. 

1. In TurboTax enter under 

Personal Income

Less Common Income

Sale of Home (gain or loss)

2. Yes, enter the 1099-S (which already reports only half) and then enter your HALF of the FMV on the date of passing

3. Yes, enter half of the closing costs

As inherited property, there should be no gain and no loss if the property was sold at the same value as the date it was inherited. 

[Jodiesfam]

The section for less common income/sale of home clearly states that is for the sale of your main home, does not include the sale of a vacation or second home.  You'll report that in the investments section. That is what I had read previously for inherited houses (which this is and qualifies in my state), but when I to to investments it only refers to the 1099-B. I never get the question so that I can say NO to the 1099-B.

[Jodiesfam]

This is what I am getting when trying to do this entry in the Investments section. My brother and I each got a 1099-S for the sale, not a 1099-B. There is never a question about which document I received. Do I just answer for the 1099-S?

OK, let's start with one investment type

(We'll come back to add any other types later.)

Stocks, Bonds, Mutual Funds

(options, index funds, ETFs)

1099‑B, 3922, 3921

Cryptocurrency

(Bitcoin, Ethereum, Dogecoin)

1099‑B, 1099‑K, Gain/Loss Report, CSV Upload

Other

(land, second homes, personal items)

1099‑S

Why don't I see my investment?

What does each form or file report?

 _____________________________________________________________________

Now, enter one sale for Premier Title, Inc.

Your info should match your 1099‑B exactly. You can add any situations next.

What type of investment did you sell? second home

How did you receive this investment? inherited

Fair market value when previous owner passed away Learn more

I have more info to enter that I don’t see here

[Critter-3]

Form 1099-S is an informational form for various different transactions. TurboTax does not have a specific entry where you could enter the 1099-S Form like you would 1099-INT or a W-2. 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/real-property/enter-sale-second-home-inh...

[Jodiesfam]

I understand where you think I should record the sale, but the instructions do not match what I see when I go to that section. I do have the Premium edition, but I don't get asked the question where I can say no to the 1099-B as per the instructions in your link--unless you are saying a 1099-S is a brokerage form. Can you also confirm that the certified FMV would be half since the 1099-S I have is for half of the sales price, and then we would also only record half of the charges associated with selling from the HUD form? Thanks

[DianeW777 · Accepted solution]

Yes, you would split the cost basis and selling expenses in half.  Each of you would report half of the sale.  

It's not clear from your comments whether you lived in the house.  The instructions below assume you and your brother never lived in the house.

Cost Basis:

• As indicated your cost basis will be the fair market value (FMV) on the date of death and since it was sold shortly after death the selling price could be considered as the FMV.  For this reason there will be no real gain and possibly a loss when taking into considerations the selling expenses.  
  1. Sign into your TurboTax return > Select Wages & Income > Scroll to Investments and Savings > Edit/Add
  2. Start or Add an investment > Scroll to select Enter a different way > select the 'Other' box (second homes, etc)
  3. Enter the financial institution on the Form l099-S > In the drop down box select 'Other'
  4. Under 'How did you receive this investment' select 'I inherited it' (This tells TurboTax it is considered long term holding period)
  5. Continue to enter the requested information.

Note:  You could also use Search > 1099b > Click on the Jump to.. link > Add or start an Investment sale

@Jodiesfam 

[Jodiesfam]

We sold the house 8 months after my mother died, and neither of us lived in it. Would the sales price still be the FMV? Is that considered shortly after inheriting it?

Thank you so much for the help.

[DianeW777 · Accepted solution]

Yes, that would be close to the time of inheritance.  You can always check to see the FMV on several internet sites however unless there is a significant reason why real estate would have had a drastic change in value, you can go forward with confidence.

@Jodiesfam