Inherited Land Sale

[aviator657]

Good morning!

My wife's grandmother passed away and the trust sold some farmland that she owned. We are 1 of 10 recipients receiving a small portion of that sale through 4 payments a year from an escrow company from the man who purchased the land. My wife received a 1099-S but I don't know how I report this on our return. Is this considered an installment sale? I don't know the value of the land when it sold or anything like that and don't quite know where to go from here. The only tax documentation that we received was the 1099-S.

Thanks!

[RobertB4444]

Are you going to receive any other tax documentation?  Trust's usually issue a form called a K-1 to the beneficiaries.  That K-1 should report your wife's share of the income from the sale of the land minus expenses.  

If you are not sure you should contact the Trustee and ask about that form K-1.  They should be able to tell you when it is arriving.  Once it does you can enter it directly into the investment income section of TurboTax in place of that 1099-S.

[M-MTax]

@aviator657 

What tax ID number did the 1099-S show? Was it your wife's SSN or an EIN for the trust?

To put it simply, if somehow the 1099-S has your wife's SSN (which would likely indicate the matter was not handled correctly), then she needs to report the transaction on her return. If that the case, though, then she will need to make inquiry (of the trustee, presumably) as to her share of the basis and any sales expenses that were incurred.

[aviator657]

It does not appear that we are going to be receiving any other tax documentation. A letter from the attorney stated that the enclosed 1099-S has been reported to the IRS and any questions would have to be submitted to a CPA. So it sounds like I need to reach out to see if I can obtain a K-1?

[aviator657]

The tax ID number on the 1099-S is my wife's SSN.

We will reach out to the executor or trustee to obtain additional information. We would need them to provide a K-1 as the previous commenter inquired about? Or what information would they need to furnish?

[DawnC]

You should definitely contact them to see what happened.   The trust should have received the 1099-S and issued her a K-1, but that apparently did not happen.   If the 1099-S reports just her share, you can enter it.  Where do I enter Form 1099-S?

[M-MTax]

Yes, if your wife's name and SSN is on the 1099-S, you should report it (her share).

Given that's the case, you don't want a K-1 at this point because it would do nothing more than duplicate the sale.

[Mike9241]

you have a choice. Since payment will be received in more than 1 tax year, you can report it as an installment sale. However, you can opt out of installment sale reporting. hopefully there's a provision that the installment payments will bear interest.