personal tax return

[Info4464]

i received money from the sale of my deceased moms home in 2024. Do i have a personal obligation to report the amount received  on my personal tax return? 

[MayaD]

If you sold an inherited property, report the sale on Schedule D (Form 1040), Capital Gains and Losses and on Form 8949, Sales and Other Dispositions of Capital Assets:

In TurboTax you would  report it as investment sale.

1. Since you did not receive a 1099-B, answer “no” to the 1099-B question or select skip Import 
2. Select Other for What type of investment did you sell?
3. Select I inherited for How did you receive this investment? 

The basis of property inherited from a decedent is generally one of the following:

• The fair market value (FMV) of the property on the date of the decedent's death (whether or not the executor of the estate files an estate tax return (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return)).
• The FMV of the property on the alternate valuation date, but only if the executor of the estate files an estate tax return (Form 706) and elects to use the alternate valuation on that return. See the Instructions for Form 706.

You can deduct the selling expenses from the gross proceed.

 Sales expenses include:

• commissions
• appraisal fees
• broker's fees
• legal fees
• advertising fees
• home inspection reports
• title insurance
• transfer taxes or fees
• geological surveys
• loan charges (points) or other fees paid on the buyer's behalf
• any fees for a service that helped you sell your home without a broker (listing fees, promotional fliers, etc.)

 Add any improvements to the cost basis of the property.

[Info4464]

Thanks.. Would i report this on my personal income tax return as i am completing a income tax return for the estate of my deceased mom and reporting it there.. I would need to to do the same for my personal tax return? I did not receive any documents except the 1099s for the sale of the home but i established a separate account with an ein number where the money was deposited. I took the proceeds from that account and distributed to the heirs according to the will.. I was confused if I would need to report my share to IRS or if I am responsible for submitting any official documents to the other heirs for the money they received. 

[AmyC]

Oh, that changes things. When you file the income on the estate return, you create K-1 forms for all the beneficiaries with their share of the income to report. Each beneficiary will enter the k-1 on their personal tax return rather than the sale of the house.

[Info4464]

So I dont file anything for my mom's estate or final return? I just submit a k1 to the beneficiaries only and report it on our personal tax return? Thanks 

[AmyC]

1. When you file the estate return, you will enter the sale of the house - that is what I meant by "file the income" earlier - and that helps create the k-1 forms.

2. Yes, give each beneficiary a k-1 form. Each reports their share on their personal return.