Sale of a home from trust as beneficiary

[MZ5]

I and my three siblings held my parents home in a trust until my father died in March of 2019. We sold the home in August of 2019 and split the proceeds four ways. How do I report the proceeds of $67,000.00 of my share through Turbo tax to the IRS. I did NOT receive a 1099-S Thanks.

[tagteam]

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@MZ5 wrote:

I and my three siblings held my parents home in a trust until my father died in March of 2019. We sold the home in August of 2019 and split the proceeds four ways. How do I report the proceeds of $67,000.00 of my share through Turbo tax to the IRS. I did NOT receive a 1099-S.

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I am sorry for your loss.

You subtract your share of the basis (most likely the fair market value on the date of death of your father) from your share of the proceeds to calculate any gain (or loss).

However, you should provide more details on the type of trust, how the title to the property was held, and the manner in which the property was sold. Was this a revocable living trust? Was title in the name of the trust, the four beneficiaries, or your father? How did the sale close without a 1099-S being issued? Were one or more beneficiaries residing at the property? 

[MZ5]

It was a revocable living trust in the name of the four siblings but none of us received a 1099-S.  No beneficiaries resided at the property also. it was held in the name of the four siblings.   Do I report it as and INVESTMENT INCOME?

[tagteam]

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@MZ5 wrote:

Do I report it as and INVESTMENT INCOME?

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No, not if it was your father's residence. You stated that this was your parents' home. 

Did your parents establish a trust with the four siblings as beneficiaries? In other words, was the transfer essentially a gift from your parents? 

[MZ5]

Yes parents established us as beneficiaries but the term "gift" was never used.

[tagteam]

Just checking because a transfer of property into a trust, during the life of the grantor, without consideration is a gift to the beneficiaries. 

[MZ5]

Essentially, my father lived there until he died. Then three months later we sold the house. 

[MZ5]

so it's not an investment then I assume? 

[tagteam]

No, it would not be investment income; it would be capital gain if you have a gain but you will not be able to recognize a loss since the property was held for personal use.

[tagteam]

You also need to figure your basis and, with gifts of property, it gets somewhat complicated. The IRS FAQ at the link below is a good guide in that regard.

https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/prope...

[MZ5 · Accepted solution]

Great. Thank you!