1099-S and Life Estate

[pickb111]

Father purchased home in 1975, and used an attorney to transfer ownership with reserved life use to my brother and I in 1982.  In 2019 it was necessary for Dad to move into an apartment, and the home was sold for $150,000.  Life use amount based on IRS actuarial tables is 25.771% ($38,657 of sale price).  The remainder ownership interest for my brother and I is 74.229% ($111,344 of sale price...$55,672 each.  We understand there will be capital gains taxes since home sold during Dad's lifetime and are meeting with accountant later this month.  At closing, attorney issued a 1099-S to my brother and I for $75,000 each, reflecting the full $150,000 sale price. 

Shouldn't the 1099-S my brother and I received be for $55,671.75, our respective portions of the remainder interest?  Is there a reference that explains this?

[RobertG]

No, the 1099-S shows the gross proceeds of the sale.  

The amount of the gain you report will depend on your basis in the property.

[golterpa]

My husbands mother passed away 10 years ago and the 3 siblings split her estate.  The 2 others chose to take the stock and we took the condo.  The value of each was $75,000.  We had to sell the condo and the 1099S says we sold it for $81,000.  We did use this money to pay off a $50,000 equity loan on our main home.  How would we report this especially since we already filed.  We just received the 1099s 2/11/2020.

[ThomasM125]

Who ever receives the 1099-S should report the full sale amount on their tax return. If some of the proceeds belong to someone else, then simply report that as an expense of the sale in Turbo Tax, so as to reflect the net amount of money the taxpayer received.

The gain to be reported on your tax return is your portion of the proceeds less your portion of the cost basis of the property. Loan payments have no affect on the gain calculation, only the net sale proceeds and the cost of the property.