1099s

Forum|Forum|1 year ago
February 7, 2025
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My husband, his brother and their step mother sold his deceased fathers home. He signed a 1099s exemption form at the closing and we did not receive a 1099s from IRS. Does that mean we don’t have to claim it. The proceeds were split 3 ways with step mother receiving 60% and the two sons 40% each.

Hal_Al

Employee

Q. Does not receiving a 1099-S mean we don’t have to claim it?

A. No. But no tax is probably due.

The cost basis of property "steps up" to fair market value on the date of death. So, there was unlikely no profit on the sale. If there was, you have to report the capital gain. If there was a loss on the sale (and there usually is because of the expenses of sale), you may be able to deduct the loss.

Step mom cannot deduct her loss if it was her home. Since the brothers (I assume) did not live there, they did not have "personal use" and can treat the sale as the sale of "investment property" (a technicality).