Level 3

Question

1099-S Proceeds

Forum|Forum|4 years ago
February 28, 2022
13 replies
42 views

Mother sell her home and divides the proceeds between her three children and they each get a 1099-S for proceeds totaling $37,000 each. How should this be entered on a 1040?

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E

Ephesians3-14

Level 7

Doesn't make sense to do it the way you mentioned. Mom gets the $250K exclusion, so why would anyone set it up this way?

M

MukePJAuthor

Level 3

Not making a lot of sense to me.

Just-Lisa-Now-

Intuit Community Champion

Mom was still alive when home was sold?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

M

MukePJAuthor

Level 3

Yes, mom is still alive. She sold her property in New Orleans

dkh

Level 15

Was this a primary residence for the mother? Were the children on the property deed?

Was she trying to gift them her proceeds?

M

MukePJAuthor

Level 3

From what I've been told, it was supposed to be a gift to the siblings.

J

jeffmcpa2010

Level 10

So mom gifted the home to the kids before it was sold, that would be the only way the 1099-S's were in their name.

Say goodby to the $250,000 exclusion and hello to 1/3 of Mom's basis for each of the kids.

If she just told the title company "send this much of the $$ to each of my kids" the -S would still be in mom's name.

Just to be sure find out if the kids had to sign at the closing - that should be the real tell as to who the owner was at that point.

Somebody gave them some great estate planning advice there!

But on the other hand - you get to charge mom for preparing a gift tax return too!

qbteachmt

Level 15

"Just to be sure find out if the kids had to sign at the closing"

On the Sale. The kids obviously filled in W9 (or Mom did it for them) but that isn't the Sale Closing.

It certainly helps Mom if it turns out they used the 1099-S only as "distribution names" as a replacement for her doing the Banking. Then, she will still be able to use her exemption.

She still has a gift issue, though, unless you can allocate it well enough to avoid that part.

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