Question

Sale of a house from a living trust

Forum|Forum|5 years ago
March 24, 2021
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I sold my mother house this past year. She had it in a living trust that she setup in around 2004, It was setup with all three sibling names on it. My mother past away in 20019. The money from sale was split 3 way. My question is how do I need to report the money from the sale of the house because Turbotax program put it in as a 1099-B and the state I live in you have pay taxes on stocks and bonds sales.

RayW7

You will report your portion of the sale of the property in the investment income section of TurboTax. Treat the transaction as if its entire value is your 1/3 portion. (You report 1/3 of the proceeds, 1/3 of the market value as the basis, etc.).

For inherited property, the holding period will always be "long term," and your cost basis will be the value of the property on the date of death of the original owner (unless the estate elected an alternate valuation date, but this is not common).

Here are the steps to enter the transaction into TurboTax:

Click on Wages & Income.
Click on Show more beside Investment Income
Click on Start (or revisit) beside Stocks, Mutual Funds, Bonds, Other.
Click on Add Sales.
Answer No for "Did or will you receive a 1099-B...?"
Follow the prompts to enter the sale. For the type of investment, select "second home" to get the most appropriate questions and categories for your sale.