1099-S

Forum|Forum|3 years ago
April 1, 2023
2 replies
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My parents bought a house in 1990 for $34,500. My oldest sister was put on the deed in case anything happened to my parents. My mom passed away in 2016 and my dad passed away in 2017. Once my father passed away, my oldest sister became full owner of the house (inherited). My sister and I did not live in the house. We sold the house on 06/15/2022. Right before selling the house, my sister added me to the deed so that we could split the money from the sale. I was added to the deed on 05/13/2022 and the house was sold on 06/15/2022. We sold the house for $420K. I got form 1099-S with gross proceeds of $210K. The amount was split evenly between the both of us. I am not sure if this is considered a gift from my sister or an inheritance? Would it be a short term or long term? Here is how I have worked things out;

FMV of property in 2016: $141K

FMV of property in 2017: $165K

Sisters total basis after both parents passed away:

1/3 of parents basis $11,500

1/6 FMV when mom passed $23,500

1/2 FMV when dad passed $82,500

My sister made me a gift once she added me to the deed of 1/2 of her interest so I get 1/2 of my sisters basis as my basis and my sisters holding period as my holding period?

My basis would be $58,750 and my holding period would be 2017(year dad passed away)

Does this look correct?

Not A Product Question

Carl11_2

Employee

Doing the math with your dates and numbers, it all looks right to me.

M-MTax

Sounds like your parents had a life estate and gave your sister the remainder. That means your sister's basis is the FMV on the date your father died in 2017 and she gave you half the house. She has to file a gift tax return but no tax will be due and you get half her basis in the house. Your sister and you each have a basis of $82.5k.