I sold my second home and my name was only on the deed; but I have to distribute the money to my family members

Forum|Forum|4 years ago
April 11, 2022
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I sold my second home and my name was only on the warranty deed; but I have to distribute the money equally to 6 family members incluing myself. This sale did yield the profit of $175,000. How do I claim tax for only my portion of $29,167?

TurboTax Home & Biz Windows

Best answer by ColeenD3

You will have to nominee the money to each of them. Please see this answer from DianeW777.

Split the income and file the appropriate sale figures on each of the sister's returns. Next you can 'nominee' the correct portion to the other sister. There is plenty of time so there is no need for concern. The IRS will not connect all the documents quickly and it will not cause any delays in processing the returns.

Nominee returns.

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area (provided on the Form 1096).

On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:

This will allow you to enter only half of the gross proceeds on your return.

ColeenD3Answer

You will have to nominee the money to each of them. Please see this answer from DianeW777.

Nominee returns.

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area (provided on the Form 1096).

On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:

This will allow you to enter only half of the gross proceeds on your return.

tuanngnttaxAuthor

Thank you for great info. I have a question. For the form 1099-S, there are 3 copies, a red one will go to IRS, the transferor one will go to whom? and the filer one will go to whom? I believe Transferor is for my family member right? and Filer is for me right? I believe I don't need to file 1099-S for myself right? Only for family member right?

ColeenD3

The issuer is the transferor and the filer is the recipient. You do not need a copy of the ones you issued except as a record that you did this.

AmeliesUncle

@tuanngnttax wrote:
I sold my second home and my name was only on the warranty deed; but I have to distribute the money equally to 6 family members incluing myself.

If it was YOUR home, why do you "have to" distribute the money?