Inheritance

[kelkk1969]

My sister was added to our Mom's house before she recently passed away. However, she was not added to the property which was still in our Dad's name. The property appraiser's office did not tell them that.   We have gone through probate and are closing on the sale of the house tomorrow.  My two sisters and I along with my niece who is the beneficiary for my brother who passed away in 2014 had to complete a 1099-S.  We were told each of us will receive 8.33% of the disbursement.  My sister had to open an estate account where the remaining 66% will be deposited.  That account will be split between my sisters and I as we are the only surviving children and our Mom's will stated the estate would be divided between us.  My question is will we have to pay taxes on the money in the estate account? If so, would my sister be the one to claim it on her taxes and how would we calculate the amount for taxes.  We want to pay her our portion for taxes if so.   There is an amount listed on the 1099-S for the 8.33% so I know we will each have to claim that on our 2025 taxes. 

[RobertB4444]

Since the estate went through probate a value should have been found and entered for the home at that time.  That value is the estate's 'basis' in the property or it's value at the time of the sale.  The only thing that would be taxable is if the price that the house was sold for is more than that basis value.  

You'll each have to enter 8.3% of the sale price as well as 8.3% of the basis on your personal tax returns.  Then the estate will need to file a tax return with 66% of the sale price and 66% of the basis on it.  

If there is no profit - if the sale price minus the basis is zero or less - then there are no taxes due for any of you.  If there is a profit then the only amount that is taxable is the profit amount.

@kelkk1969