Question on 1099-S Inherited property sale

[Dadis3proud]

This is a very adversarial situation.  If the sale happened while property rights were still in estate/before probate was closed would that result in proceeds being capital gains losses only? Which form do we use? If sale is simultaneous with closing of probate does that make proceeds defined as  income (as well?)  Where, which forms do we use? Executor is very adversarial as is estate lawyer. 

[Critter-3]

Please seek local professional advice for your situation ... asking a nameless faceless person on a public forum is not suitable  since you may get inaccurate information for your specific problem ... and the state where you live may also color the answer. 

[Dadis3proud]

Thanks. Should we definitely demand an 8971 so a professional can help us?

[jimrk]

If there was a mortgage that was paid off is that an expense?

[tagteam]

@jimrk 

You tacked your question onto a thread that was started several years ago, containing more than one issue, with the most recent post being a number of months old.

As a result, you might want to start a new thread and clarify your issue.

Generally, however, paying off the balance of a mortgage is not considered to be an expense that can be deducted from the sales price for federal income tax purposes.

[MoniqueBernardo]

My brothers and I are in a similar position.  I'm following this post.  Home was sold, then funds distributed.   I did enter the 1099 S as inherited property, in Turbo Tax and it didn't show anything due.  I was 1099ed for 160K but after paying her 1st and 2nd mortgages and HELOC loans, we each received less then half that.  Is there a place we enter the net ?  I guess it doesn't matter since it looks like it's not taxable. 

[Critter-3]

The net after mortgage satisfaction is immaterial.   In the program you enter the value of the property as of the date of death + the cost of sale - the sales price = profit or loss to claim... it is just that simple.  

[MoniqueBernardo]

None of this seems simple but what you are saying is to just report the 1099 amount.  This was my portion of the gross sale of the home (even though the other mortgages had to be paid off, those are not considered expenses).  IS that what you are saying?

[Critter-3]

Yes ... the sales price on the 1099  MINUS   ( your portion of the basis + your cost of sale) = profit or loss

The program asks for exactly these figures and your holding period is long term ... just enter the word INHERITED

[kevin5]

You need to step up the basis to the Fair Market Value on date of death.  Only the increase in FMV between date of passing and date of sale is subject to capital gains.   This could be nil if the property were sold right away.

[kevin5]

But since the estate itself sold the house (and the 1099-S was made out to the estate), there would be more than $600 in gross income.    Yes, Net income is zero and everything was disbursed.   

[duppole1012]

How do I handle a 1099-s from the sale of an estate property we sold this year? We acquired the property in 2003. We each get 1/3rd of the proceeds. 

[tagteam]

The property was "acquired in 2003"? Did the estate sell the property? 

[DAROD250]

IT WAS SOLD AFTER SHE INHERIT IT

[DAROD250]

MY WIFE AND BROTHERS AND HER  SISTER SOLD THE HOUSE, SHE GOT A 1099-S FOR 57000, BUT SHE ONLY GOT 33305.97 , WHERE DO WE PUT IN THE FORM