Level 3

Sale of the house in a life estate before the life tenant passed away

Forum|Forum|5 years ago
April 21, 2021
2 replies
18 views

Father transfered his personal residence to his daughter and son and set up a life estate in 1980. The house was sold in 2020,

1. Form 1099-S for net proceeds was only issued to his son. What is the best way to report father or daughter's portion gain on his son's return?

2. Son's basis to calculate the gain: The adjusted basis at the time of life estate set up multiplied by the percentage in IRS tables at date of life estate set up. Is it correct?

This topic has been closed for replies.

P

PamC

Level 6

I'm not sure that you apply the IRS actuarial tables to establish basis. I believe those are used to calculate values for other reasons. Basis would be what it was in Dad's hands prior to the transfer adjusted by any of the usual basis adjustments that may have occurred since.

If Dad transferred to the kids, why would he have basis?

Sounds like either the title company made a mistake or Dad didn't transfer to both son and daughter.