Inheritance

Forum|Forum|3 years ago
November 16, 2022
1 reply
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I inherited some money and a house there are three kids to be divided, my sister bought the house from the estate the lawyer said that my brother and I will receive a 1099 but no taxes would be paid because there was no profit made do I have to report the money I received from my inheritance on my income tax?

Mycharo1

Level 4

If you are issued a 1099 for the sale of the property, you should report that on your tax return.

However, you will offset your portion of the income from the sale with your portion of the basis in the property. Sounds like the lawyer knew there would be a loss on the sale, so the basis must have been more than the sale price. The basis of inherited property is the property's Fair Market Value at the time of death.

Although there should be no tax consequences, it should be included in your tax return. The IRS receives copies of 1099 forms and will follow-up if the transaction is not reported.