So Mom had an irrevocable trust ...

[Top-Jimmy]

She passed away at the end of 2021.  In the trust was her home.  I became the trustee and the house was to sold and proceeds split immediately through myself and 2 siblings.   It was sold in Feb of 2022 and the distributions made.  We all received 1099-s forms from the law office handling the sale with our portions on it.   I for the life of me can't find a place to enter this in Turbo tax premier.  I know it's taxable .. just can't seem to find where to enter it.

Any help is appreciated and thanks in advance !

[PattiF]

There is no location to directly enter the 1099-S.

The sale of an inherited home is considered an investment sale and you need to enter this info in the investment section of TurboTax.You could use TurboTax Deluxe if you use the CD\Download version. Or use the TurboTax Online Premier or higher version. 

To enter the 1099-S in TurboTax Online:

Click on Federal > Wages & Income

1. In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.  If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far.  Click on the Add More Sales link. 
2. If you haven't yet entered some investment sales, you will see a screen Did you sell any investments in 2022?  Click the Yes box.
3. On the screen,  OK, what type of investments did you sell? mark the Other box and click Continue.
4. When you get to the screen, Now we’ll walk you through entering your sale details, enter the details of the sale.  You will be able to select the type of investment in the first box (inherited home)  
5. The drop-down boxes can be filled out with the details of the house sale

• Description -address
• Date sold - your records
• Date acquired - from your records
• Sale proceeds 1099-S
• Cost basis -FMV at the time of death

Other items can be added to the cost basis such as any necessary expenses to get the house ready for sale and some of the selling expenses.

Generally, these expenses can be deducted as selling expenses:

• Appraisal fees.
• Inspections.
• Loan origination fees.
• Title fees.
• Transfer fees.
• Mortgage interest.
• Mortgage points.
• Real estate property taxes. 

We are sorry for the loss of your mother

[Hal_Al]

@Top-Jimmy  said "I know it's taxable"

It's probably not taxable, but does need to be reported on your tax return, as described at the other reply. 

The taxable amount is not the sale price. It's the capital gain (profit) made on the sale. To determine your gain, you need to know your cost basis.  

Sales of real estate are usually reportable on your tax return, especially if a form 1099-S is issued. There will most likely be no capital gain and therefore no tax. Any capital gain would be on the difference between what the house was worth on the date of the decedent's death (your "cost basis") and what the house sold for.  If you made any improvements, those costs would be added to your cost basis in determining the capital gain. 

If you or other family members lived in the house, you cannot take a deduction for a loss on the sale of a personal use property. If the house was "investment property", and was vacant between inheriting it and selling it, you can deduct the loss, if any.

[Top-Jimmy]

So even though the house was still in the trust when sold ... and then the proceeds were split up three ways ... I would still get to use a cost basis of fair market value ?   I was under the assumption since it was sold within the trust and then the proceeds were distributed to me, I would have no cost basis and the distribution would be looked at as income.   

Essentially I though the trust got the benefit of the "tax break" based on the FMV of today.   Where I would just be paying tax on the proceeds paid to me the beneficiary (one of anyway).

[VolvoGirl]

FYI - my husband sold his parents house that was in the trust.  The accountant put it on the trust tax return and paid the taxes on it.  So we didn't get a K-1 from the trust return to enter into our personal return.  So check with the accountant doing the Trust 1041 return. If the trust didn't pay the taxes then you need to get a K-1 form.  

[Hal_Al]

The trust could have reported the sale on the trust tax return, in which case they would have claimed the gain or loss, for tax purposes. You would have just received your share of the inheritance. Inherited money is not subject to income tax.  You would have had nothing to report about the sale. You might have gotten a form K-1, but it would have only reported your share of the gain or loss (not the sale amount).

But apparently, the trust has elected to have the beneficiaries report the sale instead. So, you do get the benefit of the stepped up basis, when you report the sale.

[Top-Jimmy]

I know that the trust did not pay the taxes.  

myself and the 2 other beneficiaries just got the 1099-s

[Donna1953]

Use Sch D to report your share of the sale.  If your mom died in late 2021 and you sold the house soon after, you probably do not have a gain because your basis would be 1/3 of the value of the house on the date she died.  I would enter the amount from the 1099s as the sale price (proceeds) and 1/3 of the value of the house on the date she died (which likely would be at least equal to the sale price since it was sold shortly after her death) plus 1/3 of any closing costs (such as commissions etc) from the settlement sheet.  This will likely result in a loss = to the closing costs.  You would be entitled to deduct the loss as a short-term capital loss since you did not own the house for more than a year.  Use code F. 

[Donna1953]

If it was sold within the Trust and IF the Trust files a return, the sale would be reported on the Trust return and everything would flow through to you on a K-1.  I doubt this is the case since you got 1099S.  Since you got the 1099-S you need to show that on your return on Sch D.  If you did not live in the house it is investment property and you get the benefit of the step-up in basis.  Since it was sold shortly after your mom's death, then the basis would be 1/3 of the value on her date of death plus 1/3 of the closing costs plus fix-up costs to sell.  So you would be entitled to a loss deduction on Sch D.  Your siblings would have the same loss most likely unless they paid for more or less of the closing costs or fix-up expense than you did.

[Top-Jimmy]

I appreciate all the responses.   I had no idea I could get a cost basis jump on a dispersement from a trust.  

Thanks again everyone.