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loretta_stough
New Member

Sale of house that was my father in laws but he had the 3 boys name on deed

the 3 sold house and split money. how do we claim money,spent most of money on travel trailer. we filed our taxes for 2017 and already have refund. how can we change tax form to include our share of money
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Accepted Solutions
bwa
Alumni
Alumni

Sale of house that was my father in laws but he had the 3 boys name on deed

If Dad-in-law gave it to you before death, it would be a gift (not an inheritance.)  However, if he lived in it until death (e.g., he retained a life estate) then it would still receive a "step-up" in cost to fair market value at the date of death.  If there were three owners and none lived in it after Dad's death, each would report 1/3 of

  • The sales price minus closing costs, minus
  • Cost equal to the fair market value at the date of death

If sold shortly after death, this usually results in a small deductible loss.  If a family member lived in it after death, this would result in a non-deductible loss.

If he didn't retain a life estate and live in it it would be taxed as a gift, in which cash your cost wouldn't be FMV, but rather would be 1/3 of Dad's cost.

(Sorry to keep asking questions but you might notice in this reply, details matter.)

View solution in original post

7 Replies
bwa
Alumni
Alumni

Sale of house that was my father in laws but he had the 3 boys name on deed

In whose name is the Form 1099-S issued?
loretta_stough
New Member

Sale of house that was my father in laws but he had the 3 boys name on deed

do not have one
loretta_stough
New Member

Sale of house that was my father in laws but he had the 3 boys name on deed

Dad-in-laws principal residence, After death, He died,  He gave the property to he's 3 sons
bwa
Alumni
Alumni

Sale of house that was my father in laws but he had the 3 boys name on deed

He gave it when?  (Before death, or in his will?)  One is a gift, the other is an inheritance.  They have markedly different tax consequences.
loretta_stough
New Member

Sale of house that was my father in laws but he had the 3 boys name on deed

Before death
bwa
Alumni
Alumni

Sale of house that was my father in laws but he had the 3 boys name on deed

If Dad-in-law gave it to you before death, it would be a gift (not an inheritance.)  However, if he lived in it until death (e.g., he retained a life estate) then it would still receive a "step-up" in cost to fair market value at the date of death.  If there were three owners and none lived in it after Dad's death, each would report 1/3 of

  • The sales price minus closing costs, minus
  • Cost equal to the fair market value at the date of death

If sold shortly after death, this usually results in a small deductible loss.  If a family member lived in it after death, this would result in a non-deductible loss.

If he didn't retain a life estate and live in it it would be taxed as a gift, in which cash your cost wouldn't be FMV, but rather would be 1/3 of Dad's cost.

(Sorry to keep asking questions but you might notice in this reply, details matter.)

View solution in original post

bwa
Alumni
Alumni

Sale of house that was my father in laws but he had the 3 boys name on deed

do not have one

Strange, Forms 1099-S are almost always issued.  Was it issued to someone else?

Several other questions to clarify this sale as it's still not clear what happened.

  • What type of property was it (Dad-in-laws principal residence, rental property, investment property, etc.?
  • Was it sold before or after Dad-in-laws death?
  • Did Dad-in-law die
  • If after death, were the children added to the deed before death, or did any of them live in the home after death?

spent most of money on travel trailer.

That part is clear - what the proceeds were used for have no effect on whether the sale as taxable or not.



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