We sold my moms home and split the proceeds. how is this reported? We were able to due Bond in Lieu of Probate.

[TH97]

My mom passed the week we were going to close on her house in 2015.  We were able to use Bond in Lieu of probate to sell the house in Jan 2016.  the proceeds were split between the four heirs.  How is this reported on my tax return?

Her will was filed but an estate return wasn't because the only thing she had was the house.  the remaining was used for funeral and doctor bills. 

[fanfare · Accepted solution]

The fact that you got a 1099-S requires you to report the sale, not the 1099-S.
Use the correct amounts to report the inheritance and sale of the home.
When you mark it "Inheritance" it is treated as a Long Term Capital Gain or Loss, regardless of how long you held ownership.
Divide all amounts by four on your return if you are a one-fourth heir (unless the 1099-S already did this).

In description i would put something like  "25% beneficiary of 123 Anystreet, Town, ST"

You would have to report this regardless of whether you got a 1099-S or not.
Once you figure it out you can show your siblings how to do it.

[fanfare]

P.S. Since you sold immediately, or almost immediately, you will have a loss on this transaction, in the amount of the selling expenses.

[view2]

Assumption, you received the total of the proceeds!

Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received) for each of the other owners showing the amounts allocable to each.

You must also furnish a Form 1099 to each of the other owners. File the new Form 1099 with Form 1096 with the Internal Revenue Service Center for your area.

Generally  you may enter the amount  due to other as other expenses with details in the description area as a nominee with other owner name and SS #. in the description block that is provided.

For each of the other owners showing the amounts allocable to each. You must also furnish a Form 1099 to each of the other owners. File the new Form 1099 with Form 1096 with the Internal Revenue Service Center for your area. On each new Form 1099, list yourself as the “payer” and the other owner as the “recipient.” On Form 1096, list yourself as the “Filer.”

[Carl]

fUmmmmmm. I see they posted a duplicate today. After reading, now I see why. You didn't answer the question, which is "How is this reported on my tax return?". Did you really answer this? I've never seen you answer a question like this before. Has your account been compromised maybe? 🙂

[TH97]

my question was n.ot answered.  how is this reported on my return?  I received a 1099 from the closing company

[Carl]

There are over 20 types of 1099's. I point this out, only because other's reading this may not make the same assumption that I am, and that you're talking about the 1099-S specifically. You'll report the sale in the "Sale of Home (Gain Or Loss)" in the Less Common Income section under the Personal Income tab. Note that the program will not specifically ask you for a 1099-S form. But the fact you received such a form means you have to report it, be it a gain or a loss. The aforementioned section in the program is where you'll report it.

[depreciatedasset]

For those who have future questions on this: A 1099-S is issued to all parties. 

Simply report the gross amount on your tax return and deduct the amount the other party receives using their SSN or EIN.

It will go on Form 8949 and Schedule D of your 1040.