1099-S Inherited proceeds

[Jasmine]

First time having to report this type of income and I'm not 100% clear: My client received a 1099-s for gross proceeds from his deceased mother's estate (the sale of her home). When the estate sold the property it was divided between my client and his siblings - i.e. the property was not transferred or inherited. I read somewhere "Since the property was sold while it was in the estate, the proceeds of the sale distributed to the beneficiaries are NOT taxable income." How and where would the gross proceeds be reported? If a Schedule D, I'm not sure what part? Do I need to add the FMV?

[Uncle Sam]

First time having to report this type of income and I'm not 100% clear: My client received a 1099-s for gross proceeds from his deceased mother's estate (the sale of her home). When the estate sold the property it was divided between my client and his siblings - i.e. the property was not transferred or inherited. I read somewhere "Since the property was sold while it was in the estate, the proceeds of the sale distributed to the beneficiaries are NOT taxable income." How and where would the gross proceeds be reported? If a Schedule D, I'm not sure what part? Do I need to add the FMV?

A number of facts as you wrote them are unclear.
How was the 1099-S prepared - in whose name and tax ID number?
Did the mother pass away prior to the sale - or pass away after the sale?
Was there a legal document such as a will or living trust that detailed how her assets were to be distributed?
Was there a "life-estate" in which title to the property was transferred to the siblings while she retained the right to live there as long as she lived?
Has the FMV of the property on date of death been determined, and how long after she died was the residence sold?
While the beneficiaries may not have to report any taxable income, it's possible that a Form 1041 needs to be filed reporting the sale and a determination of gain/loss be reported on the Form 1041.

[Burke]

. I read somewhere "Since the property was sold while it was in the estate, the proceeds of the sale distributed to the beneficiaries are NOT taxable income."

That is not correct on the face of it. If the mother was deceased, and the estate sold the home, it goes on Form 1041, and Schedule D-1041. See post above about to whom the 1099-S was made out and SSN/EIN on it. Proceeds go on Sche D-1041, and you use FMV at date of death as basis + expenses of sale. There may be no gain, but a loss cannot be taken. All other income and administrative expenses are also reported on Form 1041, and then if anything was distributed to the heirs, a deduction is calculated on Page 2 to determine what is passed through to the beneficiaries.