Estate Law Questions? Ask an Estate Lawyer.
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Was the property still titled in the name of the decedent? Or, had title been title been transferred to you and your sister before the sale? Thanks!
Thanks for following up. I'm sorry for the delay....thanks for your patience! If the estate sold it, the 1099 should have gone to the estate rather than the two of you. BUT, it really makes no difference because there will be no tax on the sale. Unless you have the 1099 reissued in the name of the estate, you and your sister will need to report the sale on Schedule D and Form 8949 of your respective returns to be attached to the Form 1040. BUT, there will be no gain on the sale and thus no tax because the basis of the property gets adjusted to its fair market value at the time of decedent's death. The reason you must report the sale even though there is no gain is that unless you report the sale, the IRS presumes the basis is zero and treats the entire proceeds as gain.
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