Sale of the house in a life estate before the life tenant passed away

[Taxfun]

Father transfered his personal residence to his daughter and son and set up a life estate in 1980. The house was sold in 2020,

1. Form 1099-S for net proceeds was only issued to his son. What is the best way to  report father or daughter's portion gain on his son's return?

2. Son's basis to calculate the gain: The adjusted basis at the time of life estate set up multiplied by the percentage in IRS tables at date of life estate set up. Is it correct?

[pamdory]

I'm not sure that you apply the IRS actuarial tables to establish basis.  I believe those are used to calculate values for other reasons.  Basis would be what it was in Dad's hands prior to the transfer adjusted by any of the usual basis adjustments that may have occurred since.

If Dad transferred to the kids, why would he have basis?

Sounds like either the title company made a mistake or Dad didn't transfer to both son and daughter.  

[Taxfun]

father has right to live the house for life.

[qbteachmt]

"father has right to live the house for life"

Who sold it, then? You stated the father did not die before selling?

That creates a bit of a legal mess and a tax mess.

[Taxfun]

son sold the house before father passed away.

[qbteachmt]

Son sold a house that belonged to the Father, Son and Sister. And no one gets a step up in basis to the sale price.

Read this similar topic:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/sale-of-life-estate-bef...

This might get ugly.

[sjrcpa]

Do you have the settlement sheet for the sale?

If only son is listed as seller, the situation is not as you described-son, daughter and life estate for father.

[Taxfun]

the settlement sheet listed both children's names. The entire interest in the  house was sold.