life estate

[janes1963]

in 1996 my parents executed a quit claim deed transferring the farm property to my siblings and I.  In 2020 we sold this property and I received a 1099-S.  Do I have to pay taxes on this sale?  Do I record this as investment income?

[ToddL99]

Yes, this would be the sale of an investment and you may owe taxes (unless you lived on the property for an extended period of time before selling it).

Report this as the sale of an inherited home. See Where do I enter the sale of a second home, an inherited home, or land on my 2019 taxes? 

Report your share of the proceeds and your share of the adjusted cost basis. Since your parents retained a life estate interest in the property, the cost basis will equal the value of the house or property when it was transferred to you and your siblings, not the value of its original purchase. 

For additional information, see Cost basis of an Inherited home with a life estate

[janes1963]

I did not live on this property, my parents did until they both passed away in 2019.  I guess I was miss-informed when I was told no taxes would be owed on the sale.  Can this be reported using TurboTax deluxe or do I need to spend more $ upgrading to Premier?

[ColeenD3]

You will need Premier. It would have not been taxable had it been an inheritance. The fact that they gave it to you while living, makes it a gift.