Does the sale price of a home go on K-1?

[charjean47]

We received a K-1 from my mother’s trust from the sale of her home.  There are 4 beneficiaries.  In

K-1 Box 11A is a total of 1/4 attorney fees and taxes paid.  In Box K-1 11C is a total of 1/4 commission, closing costs and Fix UP expenses.  Those are the only amounts on form K-1.  Should the amount of Income received from the sale of the property be entered on K-1?  Thanks.

[KarenM90]

If the house was owned by a trust, then the sale of the house will be reported on the trust's fiduciary return (Form 1041), with the resulting income (if any is taxable) being passed-through to your return on Form K-1.  The proceeds you received will be a distribution from the trust and will not necessarily match the gain or loss from the sale.  

I recommend that you contact the trustee and verify that there was no taxable gain or a loss from the trust if no income from the sale is showing on your K-1.

[charjean47]

I basically just have two questions.

I have a copy of the Trust’s 1041.   1041 Schedule D, Part 11, 8b:  (d) Proceeds (Sales price) and (e) Cost (or other basis) are the same amounts.  (g) has a loss amount and that amount is on Line 16.  1041 Tax and Payments, Line 28-Tax Due is zero.

I received a four figure amount after expenses were deducted.  

I received a 1099-S with an amount before the closing and Fix UP expenses were deducted.  

The Trustee informed me that the accountant stated neither the Trust or beneficaries will have to pay taxes.  

 I entered my K-1 in Turbo Tax.  Is my K-1 in error because it does not show the amount of sale before expenses?   There are only losses and no gains.  The K-1 only has an amount in 11A (taxes) and 11C (closing and Fix Up expenses).

I read the 1099-S (which has what I received before deductions) should be kept for my records and that the 1099-S should not be entered into Turbo Tax because the home sale would be duplicated.  This is where I am confused.  I don’t know how I would be duplicating the sale when the amount on the 1099-S is no where else in Turbo Tax.  Should I keep the 1099-S for my records and not enter the 1099-S information into Turbo Tax?

I am in a difficult situation because the Trustee is hard hearing and is unhappy with the accountant and does not want to ask him any questions.  Thanks for understanding.  Charjean

[ThomasM125]

It appears that the sale was reported on the partnership tax return form 1041. It is typical for the sale amount and cost to be the same since the cost of the house would be the fair market value when the individual died, so if the house was sold soon after, the sale amount would be equal to or close to the fair market value. Thus, there would be little or no gain to be taxed on.

Assuming the sale was reported on the form 1041, then you would be duplicating the reporting of it if you listed it again on your personal tax return.

The expenses listed on the form 1041 would be the expenses associated with managing the estate and selling the property. So they make sense.

So, if the sale was reported on the form 1041, and there was no taxable gain and you reported the form 1041 information in TurboTax, would you not need to make additional entries on your tax return. 

[charjean47]

I am only interested in my 1040.

I am one of 4 beneficiaries.  I entered K-1 that has the the losses.

So, are you saying for me not to enter the 1099-S that has the amount I received from the sale?

Thanks

[ThomasM125]

If the form 1099-S has your social security number on it, then it would be best to enter it on your tax return as an investment sale, with the cost being the same amount, assuming there was no taxable gain on the sale.

If the form 1099-S has the trust identification number on it, then you do not need to report it on your personal tax return.

[charjean47]

The 1099-S has the Filer's Federal ID number and The Transferor's ID number which is my social security number.  Wow.  You really helped me.  I entered the K-1 as it was and will do as you say:  I will enter the amount as an investments with the cost being the same.  That makes sense since it has my social security number.  Some have said not the enter the 1099-S because that would duplicate the sale.  I am green at this and appreciate you and everyone else who have helped me.  thanks