My Dad purchased a home (paid cash) for my sister to live in 2015. He added mine and my sisters name to the deed along with his. Sold the house in 2020 and I received a 1099-S form for 1/3 value of the sale. However I did not receive any money from the sale, it was all his. What do I put in the cost basis field (amount paid). I didn't pay anything towards the house myself (and in reality I didn't receive anything when it sold) If I use the full amount he paid, it's showing a capital loss (example he paid 125K, sold for 150K, I'm having to report 50K in tax from the sale, so showing a loss of 75K). I am checking the box "some (or all) of the proceeds from this sale do not belong to me. There is an option for Adjustment to gain or loss (leave blank if this belongs entirely to someone else). So I'm leaving blank, but still showing a capital loss? Any advise on these fields and the proper way to enter?? Thank you!
Unless the deed specifies otherwise, each co-owner owns 1/3 of the home. Your father essentially gifted you 1/3 of the home, and that comes along with 1/3 of his cost basis (what he paid). So your basis is 1/3 what he paid, and your taxable capital gain is the difference between 1/3 the selling price and 1/3 the purchase price.
Yes, you have to pay the tax even though you didn't get the cash. You need to discuss that with your sister and father.
Thank you! This makes sense, I adjusted the "cost" based on 1/3, however it is still showing as a capital loss. I don't understand this?? Gross Proceeds are positive, but Gain/Loss is negative. And it's also showing a Capital Loss Carryover. Shouldn't it be positive/gain?
this may get entered on form 1099-B because it was not your personal residence. the sales price is the 1099-S amount. cost is 1/3 dad's cost + 1/3 the sales expenses. if your share of the sales price exceeds your share of the cost you have a capital gain. if not then there is a question of whether you have a deductible capital loss.
we can't see what you have entered.
We can’t see your numbers. You might call customer support because they can do a screen share. If the sales price was, for example $250,000 and the purchase price was $200,000 in 2015, you should show as $16,000 gain.
If you do have a loss, you can’t deduct a loss on personal property. I don’t know how to indicate in TurboTax this was personal, but someone else might know.