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my wife and siblings sold a inherited property in texas we did not receive a 1099-s at the time. how do we report the proceeds
AI accountant’s answer:
If you and your wife sold an inherited property and didn't receive a 1099-S, you'll still need to report this transaction on your taxes. Here's how to report the sale: 1. Determine the basis: Since it's an inherited property, the basis is usually the fair market value (FMV) of the property on the date of the decedent's death or on an alternate valuation date if the executor of the estate chose to use it. 2. Calculate the gain or loss: Subtract the basis (determined in step 1) from the net proceeds of the sale to find the gain or loss. Your net proceeds are the selling price less selling expenses like commissions, advertising fees, and legal fees. 3. Report the transaction on your taxes: The sale should be reported on your tax return using Form 8949, Sales and Other Dispositions of Capital Assets. Fill out the form providing the necessary information, such as the date of acquisition, date of sale, sales proceeds, cost basis, and any adjustments. You'll also need to specify whether it's a short-term or long-term capital gain or loss. 4. Transfer the information to Schedule D: Once you've completed Form 8949, transfer the totals from Form 8949 to Schedule D, Capital Gains and Losses. Follow the instructions on Schedule D to calculate your total capital gains or losses. 5. Attach Schedule D to your Form 1040: After filling out Schedule D, attach it to your Form 1040, individual income tax return. Make sure to keep records of the inherited property's fair market value at the time of inheritance and the expenses related to the sale in case the IRS requests additional documentation.
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Ieva Ivanauskas, EA
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