sold deceased parents home

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Latest post Sun, Feb 15 2009 1:30 PM by Hearst86. 2 replies.
  • Sun, Feb 15 2009 11:55 AM

    • debrar
    • Not Ranked
    • Joined on Sun, Feb 15 2009
    • Posts 1

    sold deceased parents home

    I am executor of my parents estate. I sold the home. The proceeds were split between my brother and myself. I received a 1099 for the full amount of the sale as executor of the will. My brother needs to pay taxes on his half of the proceeds. How do I change the 1099 to reflect this. I do not want to be liable for tax on the entire sale as I did not receive all the funds.

    Please advise

  • Sun, Feb 15 2009 12:17 PM In reply to

    • Drew
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,417

    re: sold deceased parents home

    Makes no sense that taxes are due---give us more details

  • Sun, Feb 15 2009 1:30 PM In reply to

    Feedback [*=*] re: sold deceased parents home

    Talk to a tax pro. (I would go a little higher up the food chain than one of the store front tax outfits.)

    The chances are good that you and your brother or the estate was entitled to the value of the home on the date of death. Your capitol gains taxes would be measured only on any increase in the value of the house between death of your last living parent and when you sold the house. I also think the executor can choose an alternate valuation date that is six months after the date of death. Confirm with a tax pro. As executor, you may have needed to make that decision back then.

    Given the relatively flat real estate market the past couple of years, the home probably sold for a loss relative it's date of death value, at least on paper. Moreover, in computing any possible capital gains taxes, you or the estate may be entitled to a credit for certain buyer paid closing costs. In other words, if you determine the house was worth $100,000 on date of death and you have certain eligible closing costs of $5,000, then these costs are added to the $100,000. If you (or the estate) sold the home for $103,000, technically, there is a loss of $2,000. You may be able to take this paper loss to reduce your individual taxes. However, there probably is something that you as executor may need to do so that you and your brother can claim the loss on your individual taxes, if applicable.

    Ergo, the chances are good that neither of you really owe any taxes whatsoever. But, if your brother is reluctant to be involved, the possibility of some kind of tax break may "change his tune".
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