"Bill" <an_ordinary_guy_158[at]hotmail.com> wrote:

- quote -

Technically this is totally wrong. What's on the 1099
doesn't determine who had taxable income. Relying on an
erroneous 1099 wouldn't be an excuse in an audit.

- quote -

Her proceeds from sale go on her return, regardless of how
those proceeds were determined.

- quote -

However, that is exactly where OP's brother-in-law needs to
go.

--
Phil Marti
Clarksburg, MD

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Bill <an_ordinary_guy_158[at]hotmail.com> wrote:

- quote -

Probably not; as the resident, he's entitled to the first
$250K (or if married, $500K) of profit tax free.

Seth

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mkwarden[at]nospam.verizon.net(mjw52) asked:

- quote -

Technically, no. He's the only one named on the 1099, so
he's the only one who will have to enter the proceeds on his
Schedule D, so it will match with the _copy_ of the 1099 the
IRS received.

But you mentioned that he gave her a "portion that she asked
for." Frequently, these kinds of issues are resolved among
family members, by deducting the 'added tax' which will be
paid by the brother, from the amount given to the sister.
That's not unreasonable -- and I bet the IRS won't care
(they might even realize a bigger bite as a result).

There is a procedure available, which would allow the
brother to report his sharing the proceeds -- but I'm not
going there.

Bill

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"mjw52" <mkwarden[at]nospam.verizon.net> wrote:

- quote -

Yes. He should be issuing a 1099-S to her transfering her
share of the proceeds. Whether he does or not, she reports
the sale on line 8 of Schedule D.

--
Phil Marti
Clarksburg, MD

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"mjw52" <mkwarden[at]nospam.verizon.net> wrote

- quote -

Legally yes. She sold her portion is how the legalities
present itself, she'll owe tax on the gains (which are less
than the proceeds).

Spend some time digging back to establish the cost basis if
you don't already have it.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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"mjw52" <mkwarden[at]nospam.verizon.net> wrote

- quote -

Yes, you will be liable for the tax as a capital gain. If he
lived in the house and did not pay your wife rent for her
half of the house, he should reimburse her for at least half
of the capital gains tax.

Dick

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My wife and her brother sold the house that they both had
joint ownership in. She has not live there for 10 yrs.
Upon completion of the sale, the proceeds came in his name
and he gave her a portion that she asked for. Will we be
liable for taxes on that portion if only he is getting the
1099 form?

Thanks
Mike

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