sale of house

[superman]

Client just came in and has an issue from 2006 with the sale of a home. Client went on deed when her mom refied her house in 2001 mom died and they sold the house to split the money between the siblings. Client never filed her tax return and now IRS is putting a levy on her income saying that she owes for the sale of the house.

Question:
Would I do a sch D on the sale of the house with the cost basis of what her mom paid for the house 30 yrs prior then client pays tax on the profit because she was techinically an owner prior to death with the refi that put her on the deed as a co-owner?

I think this is the way to do it but just wanted to get a second opinion.

Thanks,
Superman

[superman]

just bringing to the top

[Burke]

Note that if Mom continued to live in house and client's name was on deed simply due to refi, AND if they sold house after she died, client & heirs got stepped-up basis. She still should have shown it on Sche D on her tax return, of course. Should have no gain if it was sold shortly after death.

[Kram BergGold]

Date of Death

When did the Mom die?

[Davc]

Note that if Mom continued to live in house and client's name was on deed simply due to refi,* AND if they sold house after she died, client & heirs got stepped-up basis. She still should have shown it on Sche D on her tax return, of course. Should have no gain if it was sold shortly after death.

*Assuming client didn't move in and assume half of the benefits and burdens of ownership.

And assuming the title was JTWROS then only your client reports the sale and possibly gifts to the siblings.