1099 S Question

[photoman]

I have a client that her mother died and gave a piece of land to the children and it was sold in 2010. My client received a 1099S for 9000 her part. on the 1099S . The 1099s shows date of closing 2/1/10 and box 2 gross proceeds 9000.00. When I enter this it is showing up on the 1040 line 13 as capital gain 9000 . This is my first one. The client says the FMV of this was no more than the 9000. Would I be able to zero this amount out. Any suggestions would be appreciated.

[ChEAr$]

I have a client that her mother died and gave a piece of land to the children and it was sold in 2010. My client received a 1099S for 9000 her part. on the 1099S . The 1099s shows date of closing 2/1/10 and box 2 gross proceeds 9000.00. When I enter this it is showing up on the 1040 line 13 as capital gain 9000 . This is my first one. The client says the FMV of this was no more than the 9000. Would I be able to zero this amount out. Any suggestions would be appreciated.

Not without substantiation. You and client need a copy of an appraisal on the whole property to determine her part of FMV. Don't sign the return unless you cover your bases.
Or should I say cover client's basis?

As an aside, you stated that "mother died and gave...." Did she make this gift before death? Or do you really mean client and siblings inherited the property due to mother's death? The reason this is important is that if it were a gift before death, the basis of the property is same as mother's basis when property was acquired.

[photoman]

Just wondering this estate was worth about 125,000 total and was divided among 9 children. This is the only thing a 1099s was issued on. Would the fact that the estate was only worth this small amount automatically exclude the 9000 on 1099s from tax or does that just not matter.

[Burke]

Are you saying the real estate was worth $125,000? Or all assets in the estate? The value of the entire estate has no bearing in this matter. The value of the real estate does. And neither figure automatically excludes it from tax.

[photoman]

The entire estate was worth 125000and the property sold for 81000.

[photoman]

Daughter age 24 Full Time Student

Would this be correct. I have a client that their daughter was 24 in October 2010. They want to know if they can claim her as a dependent for one more year. The daughter is a full time student in pharmacy school and lives on campus. Daughter has no job and gets by on her college loans and the parents support. The parents provide some monies and a car. I am thinking she might qualify as relative but would the student loan money be considered income . Any comments