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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2522
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
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Received a 1099-s for Real Estate Transactions for an inheritance

Customer Question

Received a 1099-s for Real Estate Transactions for an inheritance received how do I report it on my return?
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

You will report the amount from the 1099-S on the Schedule D (Capital Gains/Losses).

http://www.irs.gov/pub/irs-dft/f1040sd--dft.pdf -- form
http://www.irs.gov/pub/irs-pdf/i1040sd.pdf -- Instructions

In order to determine whether you have incurred a gain or a loss, you will need to determine the basis of the property.

The basis for inherited property from a decedent is generally the fair market value of the property at the date of the decedent's death, regardless of when you acquire the property.

If the selling price was more than the basis, you have incurred a gain, if less, you have incurred a loss.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2522
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 3 other Tax Specialists are ready to help you
Expert:  Tax.appeal.168 replied 2 years ago.
In addition, please note that the gain or loss amount will be reflected on line 13 of the Form 1040.
Expert:  Tax.appeal.168 replied 2 years ago.
I will be leaving the computer shortly, should you require further communication from me, I will respond in the morning.

Thank you.
Customer: replied 2 years ago.
Hello Angela,

Thank you for your answer. This property was sold in Texas, I do not have the fair market value of it when it was sold because it it was split between me and someone else. The have all the information and will not furnish it to me.

Also in order to save the property in 2008 I paid $30,000 of property taxes that were behind. Can I include that is part of my tax basis?

Please advise.

Thank you for all your help.

Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,

You are welcome, thank you for accepting.

Regarding obtaining the FMV of the property, you can possibly obtain this information online by using one of those property valuation sites, or you can call the County Assessor's Office in Texas to possibly get that information.

Yes, you may include the $30,000 that you paid in taxes to save the property as part of the cost basis.

Cost Basis

The basis of property you buy is usually its cost. The cost is the amount you pay in cash, debt obligations, other property, or services. Your cost also includes amounts you pay for the following items.

Sales tax,

Freight,

Installation and testing,

Excise taxes,

Legal and accounting fees (when they must be capitalized),

Revenue stamps,

Recording fees, and

Real estate taxes
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2522
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 3 other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Hi Angela,

I entered all the information as you had recommended and I have a loss of -3,000. I know my loss was more but I am only allowed to take this each year correct. Also is a loss on an inheritance allowed.

Thank you for all your help.
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,

If you inherit the property, and immediately sell it, since you have never used it for personal or business purposes or anything else, you can treat it as sale of investment property, therefore you can claim the capital loss.

You are correct, you are only allowed to take a loss of $3,000 per you. Example if the total loss on the property was $12,000, you can carryover the loss balance from year to year until the loss amount has been claimed.

Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2522
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 3 other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Hi Angela,

Another tax year! Wondering if you could help me with another complicated question. HOpefully this will be the last year I have complicated taxes. I received about $45,000 as a gift from my mother. But I am not sure if I have to report it since I used to buy a small property and didnt keep any of it.

Help!
Expert:  Tax.appeal.168 replied 2 years ago.
Hello Again,

Sorry, I am at a disadvantage, I do not know your name. Thank you for requesting my assistance again. Yes, another tax year...I hear you on that one. As for the $45,000 rec'd as a gift from your mother, gifts are not taxable to the receiver, only to the donor...when taxation is applicable. There is nothing that you need to do, it is not taxable, nor do you have to report it. However, as the gift amount exceeds the $13,000 annual gift exclusion, your mother will need to complete a Form 709 (Gift Tax Return). This is an informational return which is required by the IRS when a gift is given over the annual exclusion amount, which again is $13,000 per person per year.

Link to Form 709/instructions:

http://www.irs.gov/pub/irs-pdf/f709.pdf
http://www.irs.gov/pub/irs-pdf/i709.pdf

Please let me know if I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2522
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 3 other Tax Specialists are ready to help you
Expert:  Tax.appeal.168 replied 2 years ago.
Thank you for the generous bonus. I appreciate it. You are very kind.

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