I need some help on a topic of nominee adjustemnt on a property that I sold in 2022.

[tuanngnttax]

I sold my Second home in this year 2022 and my name was the only one on the deed. I wanted to distribute part of the gross proceeds to 4 siblings through the Nominee Adjustment process and I know that I have to fill out the form 1099-S for each of them and send the 1099-S form to IRS & my siblings.  There is NO paperwork that can prove my 4 siblings have an ownership interest in the property that I have sold.  3 out of 4 siblings wanted to use their children to represent them to file taxes for their shares of the gross proceeds.  I will pay tax on my part and they will pay tax on their parts.  Is this whole thing legal?  Will I be in trouble? Again my name is only on the deed and there is no paperwork that proves my 4 siblings co-own the property rightfully.

[Anonymous_ · Accepted solution]

Starting a new thread on this issue is not going to get you anywhere. 

If you want second, third, fourth, and fifth opinions, you need to consult with a local tax professional and local legal counsel.

[TomD8]

I also think you need to consult an attorney or tax professional.  I believe that if you were the sole legal owner of the property, then you alone are responsible for any capital gain tax due on the sale, regardless of what you do with the proceeds.

In fact, since you are receiving nothing in return for the funds you are transferring to your relatives, I believe an IRS auditor will construe the "transfers" to be gifts. 

[tuanngnttax]

I agree and I will consult with local tax professional.